Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms

Mariko Sakakibara and Lee Branstetter

No 7066, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Does an expansion of patent scope induce more innovative effort by firms? This article provides evidence on this question by examining firm responses to the Japanese patent reforms of 1988. Interviews with practitioners suggest the reforms significantly expanded the scope of patent rights in Japan, but that the average response in terms of additional R&D effort and innovative output was quite modest. Interviews also suggest that firm organizational structure is an important determinant of the level of response. Econometric analysis using Japanese and U.S. patent data on 307 Japanese firms confirms that the magnitude of the response is quite small.

Date: 1999-04
New Economics Papers: this item is included in nep-ind, nep-law and nep-tid
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Published as Sakakibara, Mariko and Lee Branstetter. "Do Stronger Patents Reduce More Innovation? Evidence From The 1998 Japanese Patent Law Reforms," Rand Journal of Economics, 2001, v32(1,Spring), 77-100.

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