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Visibility of technology and cumulative innovation: Evidence from trade secrets laws

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  • Ganglmair, Bernhard
  • Reimers, Imke

Abstract

We use exogenous variation in the strength of trade secrets protection to show that a relative weakening of patents (compared to trade secrets) has a disproportionately negative effect on the disclosure of processes - inventions that are not otherwise visible to society. We develop a structural model of initial and follow-on innovation to determine the effects of such a shift in disclosure on overall welfare in industries characterized by cumulative innovation. We find that while stronger trade secrets encourage investment in R&D, they may have negative e ects on overall welfare - the result of a significant decline in follow-on innovation.

Suggested Citation

  • Ganglmair, Bernhard & Reimers, Imke, 2019. "Visibility of technology and cumulative innovation: Evidence from trade secrets laws," ZEW Discussion Papers 19-035, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:19035
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    Cited by:

    1. Rammer, Christian, 2022. "Measuring process innovation output: Results from firm-level panel data," ZEW Discussion Papers 22-002, ZEW - Leibniz Centre for European Economic Research.
    2. Danzer, Alexander M. & Feuerbaum, Carsten & Gaessler, Fabian, 2020. "Labor Supply and Automation Innovation," IZA Discussion Papers 13429, Institute of Labor Economics (IZA).
    3. Gaetan de Rassenfosse & Gabriele Pellegrino & Emilio Raiteri, 2020. "Do Patents Enable Disclosure? Evidence from the Invention Secrecy Act," Working Papers 9, Chair of Innovation and IP Policy.
    4. Daniel P. Gross, 2019. "The Hidden Costs of Securing Innovation: The Manifold Impacts of Compulsory Invention Secrecy," NBER Working Papers 25545, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    cumulative innovation; disclosure; self-disclosing inventions; Uniform Trade Secrets Act;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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