 Are Patents Discouraging Innovation?Soma Dey () No 382, 2006 Meeting Papers from Society for Economic Dynamics Abstract: The strengthening of the U.S. patent regime in the early eighties was followed by a sharp increase in patenting but did not change the R&D expenditure significantly in some industries in the U.S. This “patent paradox†is prominently observed in complex industries, like the semiconductor industry. In this paper I develop a model of invention and product development to examine the effects of a patent regime change on the patenting and R&D decisions of firms in complex industries. Firms in these industries have a greater need to access a large number of ideas to successfully develop an end product. I consider two different environment — one without licensing and one with licensing. While a stronger patent regime leads to higher patenting and R&D activities in both environments, the strategic complementarity between patenting and R&D is relatively weaker in the presence of licensing. A stronger patent regime change that creates incentives for firms to increase patenting activity, therefore, may not lead to a similar increase in R&D activity. Keywords: Patents; patent regime; licensing; complex industries (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:red:sed006:382 Access Statistics for this paper More papers in 2006 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC. |
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