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Patents, Licensing, And Market Structure In The Chemical Industry

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  • Ashish Arora

    (carnegie mellon university)

Abstract

The strategies of rent appropriation and market structure are inter- dependent. How firms use patents depends upon industry structure, and in turn, affects industry structure. In the early part of the history of the chemical industry, market leaders combined patents and secrecy to deter entry. Patents were also used to within cartels to organize technology licensing. The role of patents changed in the less concentrated post war markets. In bulk organic chemicals and petrochemicals, even chemical producers use licensing as an important means of generating revenue from process innovations. The increased importance of technology licensing is closely related to the emergence of a class of specialized process design and engineering firms that have played an important role in the development and diffusion of process innovations. In so doing, they have helped lower entry barriers and increase competition in the industry.

Suggested Citation

  • Ashish Arora, 1996. "Patents, Licensing, And Market Structure In The Chemical Industry," Industrial Organization 9605003, EconWPA.
  • Handle: RePEc:wpa:wuwpio:9605003
    Note: Type of Document - ps; prepared on IBM PC ; to print on PostScript; pages: 31 ; figures: none. We never published this piece and now we would like to reduce our mailing and xerox cost
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    References listed on IDEAS

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    1. N/A, 1968. "Chemical Process Plant : Innovation and the World Market," National Institute Economic Review, National Institute of Economic and Social Research, vol. 45(1), pages 29-51, August.
    2. Lieberman, Marvin B., 1987. "Patents, learning by doing, and market structure in the chemical processing industries," International Journal of Industrial Organization, Elsevier, vol. 5(3), pages 257-276.
    3. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107 Elsevier.
    4. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-583, June.
    5. Tarun Khanna & Bharat N. Anand, 1996. "Intellectual Property Rights and Contract Structure," Yale School of Management Working Papers ysm37, Yale School of Management.
    6. Ashish Arora, 1995. "Licensing Tacit Knowledge: Intellectual Property Rights And The Market For Know-How," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 4(1), pages 41-60.
    7. Michael L. Katz & Carl Shapiro, 1986. "How to License Intangible Property," The Quarterly Journal of Economics, Oxford University Press, vol. 101(3), pages 567-589.
    8. von Hippel, Eric, 1990. "Task partitioning: An innovation process variable," Research Policy, Elsevier, vol. 19(5), pages 407-418, October.
    9. Arora, Ashish, 1996. "Contracting for tacit knowledge: the provision of technical services in technology licensing contracts," Journal of Development Economics, Elsevier, vol. 50(2), pages 233-256, August.
    10. Horstmann, Ignatius & MacDonald, Glenn M & Slivinski, Alan, 1985. "Patents as Information Transfer Mechanisms: To Patent or (Maybe) Not to Patent," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 837-858, October.
    11. Caves, Richard E & Crookell, Harold & Killing, J Peter, 1983. "The Imperfect Market for Technology Licenses," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 45(3), pages 249-267, August.
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    More about this item

    Keywords

    Patents; Licensing; Market Structure; Chemicals;

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • N60 - Economic History - - Manufacturing and Construction - - - General, International, or Comparative

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