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Empirical Implications of Sequential Innovation and Legal Action

Author

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  • Arai, Yasuhiro
  • Moriya, Fumitoshi

Abstract

This article compares two hypotheses, sequential innovation and legal action, and theoretically obtains the testable implications to specify which hypothesis is crucial in empirical evidence. Our main results are that we distinguish between the two hypotheses based on i) whether the cross-term coefficient of the number of patents and the dummy of patent law are positive or negative and ii) whether the variance of the patent distribution is decreased.

Suggested Citation

  • Arai, Yasuhiro & Moriya, Fumitoshi, 2013. "Empirical Implications of Sequential Innovation and Legal Action," Working Paper Series 163, Center for Japanese Business Studies (HJBS), Graduate School of Commerce and Management Hitotsubashi University.
    • Handle: RePEc:hit:hjbswp:163
    as

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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/25433/070hjbsWP_163.pdf
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    References listed on IDEAS

    as
    1. Boldrin, Michele & Levine, David K., 2008. "Perfectly competitive innovation," Journal of Monetary Economics, Elsevier, vol. 55(3), pages 435-453, April.
    2. Sakakibara, Mariko & Branstetter, Lee, 2001. "Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 77-100, Spring.
    3. Josh Lerner, 2002. "150 Years of Patent Protection," American Economic Review, American Economic Association, vol. 92(2), pages 221-225, May.
    4. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    5. Suzanne Scotchmer, 1996. "Protecting Early Innovators: Should Second-Generation Products Be Patentable?," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 322-331, Summer.
    6. Josh Lerner, 2009. "The Empirical Impact of Intellectual Property Rights on Innovation: Puzzles and Clues," American Economic Review, American Economic Association, vol. 99(2), pages 343-348, May.
    7. James Bessen & Eric Maskin, 2009. "Sequential innovation, patents, and imitation," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 611-635, December.
    8. Suzanne Scotchmer, 1991. "Standing on the Shoulders of Giants: Cumulative Research and the Patent Law," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 29-41, Winter.
    9. Menell, Peter S. & Scotchmer, Suzanne, 2007. "Intellectual Property Law," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 19, pages 1473-1570, Elsevier.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Intellectual Property Rights; Sequential Innovation; Multitask;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • K39 - Law and Economics - - Other Substantive Areas of Law - - - Other
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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