Rewarding innovation efficiently: Research spill-overs and exclusive IP rights

Vincenzo Denicol and Luigi A. Franzoni
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Vincenzo Denicol: Indira Gandhi Institute of Development Research
Luigi A. Franzoni: Indira Gandhi Institute of Development ResearchInstitute of Economic Growth

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: We investigate the conditions for the desirability of exclusive intellectual property rights for innovators as opposed to weak rights allowing for some degree of imitation and ex-post competition. The comparison between the two alternatives reduces to a specific "ratio test," which suggests that strong exclusive IP rights are preferable when competition from potential imitators is weak, the innovation attracts large R&D investments, and research spill-overs are small.

Keywords: Kaplow test; research spill-overs; patents and trade secrets; independent invention defense; mandatory licensing (search for similar items in EconPapers)
JEL-codes: K21 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2011-01
New Economics Papers: this item is included in nep-cis, nep-com, nep-ino, nep-ipr, nep-pr~, nep-law, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:ind:igiwpp:2011-002

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