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Korea's Shift from Process to Product Patents in the Pharmaceutical Industry: An Event Study of the Impact of American Pressure on Korean Film

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  • Sumner La Croix

    () (Department of Economics, University of Hawaii at Manoa)

Abstract

Out analysis focuses on the effect of U.S. government pressure on Korea to adopt product patents for chemical and pharmaceutical products. American pressure began in November 1985 and ended with the Korean Legislature's passage of a new patent law in December 1986. We conduct an event study of the effect of the new patent law on the value of Korean pharmaceutical firms listed on the Korea Stock Exchange. Regression analysis shows that the new law induced excess returns of -74 percent over the 14-month analysis period. The results suggest that adoption of stronger patent laws reduced Korea's wealth.

Suggested Citation

  • Sumner La Croix, 1994. "Korea's Shift from Process to Product Patents in the Pharmaceutical Industry: An Event Study of the Impact of American Pressure on Korean Film," Working Papers 199402, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:199402
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    File URL: http://www.economics.hawaii.edu/research/workingpapers/88-98/WP_94-2.pdf
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    References listed on IDEAS

    as
    1. Engle, R. F. & Granger, C. W. J. (ed.), 1991. "Long-Run Economic Relationships: Readings in Cointegration," OUP Catalogue, Oxford University Press, number 9780198283393.
    2. Boehmer, Ekkehart & Masumeci, Jim & Poulsen, Annette B., 1991. "Event-study methodology under conditions of event-induced variance," Journal of Financial Economics, Elsevier, vol. 30(2), pages 253-272, December.
    3. Kawaura, Akihiko & La Croix, Sumner J, 1995. "Japan's Shift from Process to Product Patents in the Pharmaceutical Industry: An Event Study of the Impact on Japanese Firms," Economic Inquiry, Western Economic Association International, vol. 33(1), pages 88-103, January.
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    More about this item

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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