Entry and Patenting in the Software Industry
Iain Cockburn () and
Megan MacGarvie ()
No 12563, NBER Working Papers from National Bureau of Economic Research, Inc
To what extent are firms kept out of a market by patents covering related technologies? Do patents held by potential entrants make it easier to enter markets? We estimate the empirical relationship between market entry and patents for 27 narrowly defined categories of software products during the period 1990-2004. Controlling for demand, market structure, average patent quality, and other factors, we find that a 10% increase in the number of patents relevant to market reduces the rate of entry by 3-8%, and this relationship intensified following expansions in the patentability of software in the mid-1990s. However, potential entrants with patent applications relevant to a market are more likely to enter it. Finally, patents appear to substitute for complementary assets in the entry process, as patents have both greater entry-deterring and entry-promoting effects for firms without prior experience in other markets.
JEL-codes: L1 L6 O34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ent, nep-ind, nep-ino, nep-mic, nep-net and nep-tid
Note: PR IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Published as Cockburn, I., and MacGarvie, M. “Entry and Patenting in the Software Industry.” Management Science, May 2011. vol. 57 no. 5.
Downloads: (external link)
Journal Article: Entry and Patenting in the Software Industry (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:12563
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().