The Protection of Innovations

Gamal Atallah

No 0402E, Working Papers from University of Ottawa, Department of Economics

Abstract: This paper proposes a model where firms invest in secrecy to limit technological spillovers accruing to their competitors, in addition to investing in cost-reducing R&D. The main result of the paper is that increases in spillovers increase secrecy, suggesting that legal and strategic protection are substitutes. Higher product differentiation is associated with higher levels of innovation and lower levels of secrecy. An increase in the size of the market, a reduction in the cost of secrecy,or a reduction in the cost of R&D, all lead to an increase in secrecy. As for the effect of spillovers on effective cost reduction, it is positive when products are sufficiently differentiated, and has an inverted-U shape with low product differentiation. Compared to price competition, quantity competition yield higher levels of R&D, secrecy and effective cost reduction.

Keywords: Secrecy; Protection; Innovation; Technology; Spillovers; R&D; Appropriability (search for similar items in EconPapers)
JEL-codes: L13 O31 O32 O34 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://sciencessociales.uottawa.ca/economics/sites ... mics/files/0402E.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 502 Bad Gateway (http://sciencessociales.uottawa.ca/economics/sites/socialsciences.uottawa.ca.economics/files/0402E.pdf [301 Moved Permanently]--> https://sciencessociales.uottawa.ca/economics/sites/socialsciences.uottawa.ca.economics/files/0402E.pdf)

Related works:
Working Paper: The Protection of Innovations (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ott:wpaper:0402e

Access Statistics for this paper

More papers in Working Papers from University of Ottawa, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Aggey Semenov (econ@uottawa.ca).