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

  • Mariko Sakakibara
  • Lee Branstetter
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    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.

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    File URL: http://www.nber.org/papers/w7066.pdf
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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7066.

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    Date of creation: Apr 1999
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    Publication status: published as Sakakibara, Mariko and Lee Branstetter. "Do Stronger Patents Reduce More Innovation? Evidence From The 1998 Japanese Patent Law Reforms," Rand Journal of Economics, 2001, v32(1,Spring), 77-100.
    Handle: RePEc:nbr:nberwo:7066
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    12. Ricardo J. Caballero & Adam B. Jaffe, 1993. "How High are the Giants' Shoulders: An Empirical Assessment of Knowledge Spillovers and Creative Destruction in a Model of Economic Growth," NBER Chapters, in: NBER Macroeconomics Annual 1993, Volume 8, pages 15-86 National Bureau of Economic Research, Inc.
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