Universität zu Köln

Aghion, Philippe, Howitt, Peter and Prantl, Susanne (2015). Patent rights, product market reforms, and innovation. J. Econ. Growth, 20 (3). S. 223 - 263. DORDRECHT: SPRINGER. ISSN 1573-7020

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Abstract

In this paper, we provide empirical evidence to the effect that strong patent rights may complement competition-increasing product market reforms in fostering innovation. First, we find that the product market reform induced by the large-scale internal market reform of the European Union in 1992 enhanced, on average, innovative investments in manufacturing industries of countries with strong patent rights since the pre-sample period, but not so in industries of countries with weaker patent rights. Second, the positive response to the product market reform is more pronounced in industries where, in general, innovators tend to value patent protection higher than in other industries, except for the manufacture of electrical and optical equipment. The observed complementarity between competition and patent protection can be rationalized using a Schumpeterian growth model with step-by-step innovation. In such a model, better patent protection prolongs the period over which a firm that successfully escapes competition by innovating, actually enjoys higher monopoly rents from its technological upgrade.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Aghion, Philippe UNSPECIFIED UNSPECIFIED UNSPECIFIED Howitt, Peter UNSPECIFIED UNSPECIFIED UNSPECIFIED Prantl, Susanne UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-394944
DOI:	10.1007/s10887-015-9114-3
Journal or Publication Title:	J. Econ. Growth
Volume:	20
Number:	3
Page Range:	S. 223 - 263
Date:	2015
Publisher:	SPRINGER
Place of Publication:	DORDRECHT
ISSN:	1573-7020
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language INTELLECTUAL PROPERTY-RIGHTS; COMPETITION; PROTECTION; STIMULATE; INDUSTRY; PROGRAM; POLICY; GROWTH; LEVEL; PANEL Multiple languages Economics Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/39494