Patent Protection, Innovation and Technology Licensing
Year: 2014
Type: article
Abstract: We show that the common wisdom suggesting higher investment in innovation under a stronger patent protection may not be true if the innovator can license its technology ex‐post innovation. If the initial cost of production is high and the slope of the marginal cost of undertaking innovation is moderate, investment in innovation is maximised at a patent protection that is weaker than the strongest patent protection. Otherwise, strongest patent protection maximises investment in innovation. We also show that welfare is maximised neither at the strongest patent protection nor at the weakest patent protection but at an intermediate patent protection. Our results are important for patent policies.
Source: Australian Economic Papers
Authors: Leonard F.S. Wang, Arijit Mukherjee
Institutions: National University of Kaohsiung, University of Nottingham
Language: English
Subfield: Management of Technology and Innovation
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1550515876