Does Compulsory Licensing Discourage Invention? Evidence From German Patents After WWI

Joerg Baten, Nicola Bianchi and Petra Moser

No 21442, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper investigates whether compulsory licensing – which allows governments to license patents without the consent of patent-owners – discourages invention. Our analysis exploits new historical data on German patents to examine the effects of compulsory licensing under the US Trading-with-the-Enemy Act on invention in Germany. We find that compulsory licensing was associated with a 28 percent increase in invention. Historical evidence indicates that, as a result of war-related demands, fields with licensing were negatively selected, so OLS estimates may underestimate the positive effects of compulsory licensing on future inventions.

JEL-codes: N3 N32 N34 O3 O34 O38 (search for similar items in EconPapers)
Date: 2015-07
New Economics Papers: this item is included in nep-his, nep-ino, nep-ipr, nep-pr~, nep-law and nep-lma
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Citations: View citations in EconPapers (2)

Published as Joerg Baten, Nicola Bianchi, Petra Moser, Compulsory licensing and innovation – Historical evidence from German patents after WWI, Journal of Development Economics, Volume 126, 2017, Pages 231-242, ISSN 0304-3878, https://doi.org/10.1016/j.jdeveco.2017.01.002.

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