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The Empirical Impact of Intellectual Property Rights on Innovation: Puzzles and Clues

The Empirical Impact of Intellectual Property Rights on Innovation: Puzzles and Clues American Economic Review: Papers & Proceedings 2009, 99:2, 343–348 http://www.aeaweb.org/articles.php?doi=10.1257/aer.99.2.343 By Josh Lerner* Economists have long seen the patent system as a crucial lever through which policymakers affect the speed and nature of innovation in the economy. It is not surprising, then, that the profound changes that have roiled the global patent system over the past 25 years are attracting increasing attention from the economics profession. A critical question relates to the impact of these shifts: to what extent do they really affect the pace of innovative discovery and diffusion? Much of the theoretical economics literature, such as Richard Gilbert and Carl Shapiro (1990), has assumed an unambiguous relationship between the strength of patent protection and the rate of innovation. This assumption has been relaxed in a line of work on sequential innovation, beginning with Suzanne Scotchmer and Jerry Green (1990). This research addresses this question by examining the impact of major patent policy shifts in 60 nations over the past 150 years. I examine the changes in patent applications by residents of the nation undertaking the policy change. While I tabulate domestic filings by residents and nonresidents alike, confounding factors may influence this measure. Thus, I also http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review American Economic Association

The Empirical Impact of Intellectual Property Rights on Innovation: Puzzles and Clues

American Economic Review , Volume 99 (2) – May 1, 2009

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References (14)

Publisher
American Economic Association
Copyright
Copyright © 2009 by the American Economic Association
Subject
Papers
ISSN
0002-8282
DOI
10.1257/aer.99.2.343
Publisher site
See Article on Publisher Site

Abstract

American Economic Review: Papers & Proceedings 2009, 99:2, 343–348 http://www.aeaweb.org/articles.php?doi=10.1257/aer.99.2.343 By Josh Lerner* Economists have long seen the patent system as a crucial lever through which policymakers affect the speed and nature of innovation in the economy. It is not surprising, then, that the profound changes that have roiled the global patent system over the past 25 years are attracting increasing attention from the economics profession. A critical question relates to the impact of these shifts: to what extent do they really affect the pace of innovative discovery and diffusion? Much of the theoretical economics literature, such as Richard Gilbert and Carl Shapiro (1990), has assumed an unambiguous relationship between the strength of patent protection and the rate of innovation. This assumption has been relaxed in a line of work on sequential innovation, beginning with Suzanne Scotchmer and Jerry Green (1990). This research addresses this question by examining the impact of major patent policy shifts in 60 nations over the past 150 years. I examine the changes in patent applications by residents of the nation undertaking the policy change. While I tabulate domestic filings by residents and nonresidents alike, confounding factors may influence this measure. Thus, I also

Journal

American Economic ReviewAmerican Economic Association

Published: May 1, 2009

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