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Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms

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  • Mariko Sakakibara
  • Lee Branstetter

Abstract

Does an expansion of patent scope induce more innovative effort by firms? This article provides evidence on this question by examining firm responses to the Japanese patent reforms of 1988. Interviews with practitioners suggest the reforms significantly expanded the scope of patent rights in Japan, but that the average response in terms of additional R&D effort and innovative output was quite modest. Interviews also suggest that firm organizational structure is an important determinant of the level of response. Econometric analysis using Japanese and U.S. patent data on 307 Japanese firms confirms that the magnitude of the response is quite small.

Suggested Citation

  • Mariko Sakakibara & Lee Branstetter, 1999. "Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms," NBER Working Papers 7066, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7066
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    Cited by:

    1. Joel Blit & Mauricio Zelaya, 2015. "Do Firms Respond to Stronger Patent Protection by Doing More R&D?," Working Papers 1501, University of Waterloo, Department of Economics, revised Aug 2015.
    2. Emmanuel Duguet & Claire Lelarge, 2012. "Does Patenting Increase the Private Incentives to Innovate? A Microeconometric Analysis," Annals of Economics and Statistics, GENES, issue 107-108, pages 201-238.
    3. Louise Keely, 2001. "Using Patents In Growth Models," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(6), pages 449-492.
    4. Gamba, Simona, 2017. "The Effect of Intellectual Property Rights on Domestic Innovation in the Pharmaceutical Sector," World Development, Elsevier, vol. 99(C), pages 15-27.
    5. Yi Qian, 2011. "Counterfeiters: Foes or Friends? How Do Counterfeits Affect Different Product Quality Tiers?," NBER Working Papers 16785, National Bureau of Economic Research, Inc.
    6. Herz, Benedikt & Mejer, Malwina, 2019. "Effects of the European Union trademark: Lessons for the harmonization of intellectual property systems," Research Policy, Elsevier, vol. 48(7), pages 1841-1854.
    7. Joel Blit & Mauricio Zelaya, "undated". "The impact of patent protection on R&D. Evidence using export markets," Working Papers 17010, University of Waterloo, Department of Economics.
    8. Yi Qian, 2010. "Are National Patent Laws the Blossoming Rain?," NBER Working Papers 16295, National Bureau of Economic Research, Inc.
    9. Flor, Christian Riis & Moritzen, Mark Raun, 2020. "Entering a new market: Market profitability and first-mover advantages," Journal of Corporate Finance, Elsevier, vol. 62(C).

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