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Are Intellectual Property Rights Detrimental to Innovation?

Author

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  • Crampes, Claude
  • Langinier, Corinne

Abstract

Intellectual property rights are legal constraints that limit entry in industries where incumbents are innovators. The set of legal constraints is the same for all industries, without considering that the externalities created by entry are not necessarily negative for the incumbent or that the incumbent's R&D expenditures can be detrimental to entrants. We show that one unique set of legal rules can foster innovation and increase total R&D expenditures in some industries and be detrimental in others. The model is illustrated by case studies from the information and communication technologies industry (software, hardware, music and videogame industries).

Suggested Citation

  • Crampes, Claude & Langinier, Corinne, 2005. "Are Intellectual Property Rights Detrimental to Innovation?," Staff General Research Papers Archive 12267, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:12267
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    File URL: http://www2.econ.iastate.edu/papers/p3910-2005-03-25.pdf
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    References listed on IDEAS

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    Cited by:

    1. Sebastian von Engelhardt & Sushmita Swaminathan, 2008. "Open Source Software, Closed Source Software or Both: Impacts on Industry Growth and the Role of Intellectual Property Rights," Discussion Papers of DIW Berlin 799, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    innovation; spillover; leadership; R&D regulation;

    JEL classification:

    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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