Patented pharmaceuticals diffuse across international borders slowly, and sometimes not at all. This column analyses the effect of patent protection and price regulation on the speed of and extent to which drugs enter new markets. There is a fundamental tradeoff between affordability – taking the form of low patent protection and strong price regulation – and rate of entry into a national market.
Iain M. Cockburn, Jean O. Lanjouw, Mark Schankerman, Saturday, November 22, 2014
Masayuki Morikawa, Sunday, July 20, 2014
Innovation is a key driver of productivity growth, but innovation in the service sector has received relatively little attention. This column shows that the total factor productivity gap between Japanese firms with and without innovations is larger in services than in manufacturing. Whereas the percentage of firms holding patents is much higher in manufacturing than in services, trade secrets are just as important in both sectors. These results suggest that the protection of trade secrets makes an important contribution to productivity growth.
Chris Forman, Avi Goldfarb, Shane Greenstein, Friday, May 23, 2014
The diffusion of the internet has had varying effects on the location of economic activity, leading to both increases and decreases in geographic concentration. This column presents evidence that the internet worked against increasing concentration in invention. This relationship is particularly strong for inventions with more than one inventor, and when inventors live in different cities.
Thomas Holmes, Ellen McGrattan, Edward C. Prescott, Friday, November 8, 2013
Why are FDI flows between China and technologically-advanced countries surprisingly small? This column analyses the issue in light of China's quid pro quo policy that makes technology transfer a precondition of foreign firms selling in China. We find that the policy provides significant gains for China, but losses to its FDI partners.
Otto Toivanen, Lotta Väänänen, Sunday, July 21, 2013
Policymakers are worried that the number of inventors coming from the West is dwindling. Is the rising cost of higher education putting off innovative individuals? And are China, India and other emerging economies right to invest so heavily in academic subjects that produce inventors? This column argues that the number of inventors can be increased through the right educational policy. New research based on data from Finland and the US provides a justification for the policies adopted by emerging economies, and for Western policymakers’ worries about the decline of interest in Engineering and Science.
Carsten Fink, Ernest Miguelez, Julio Raffo, Wednesday, July 17, 2013
Migration is a hot-button issue across the globe. This column summarises new evidence on the patterns of skilled-worker migration, focusing on the specific case of inventors. A novel data source that traces worldwide migration flows for inventors suggests that, excluding a few nuances, the economic incentives for general migration also seem to influence inventors’ migration decisions.
Alberto Galasso, Mark Schankerman, Tuesday, May 14, 2013
Do patents encourage innovation? This column presents a new analysis, suggesting that patent rights block cumulative innovation only in very specific environments. To encourage innovation, remedial government policies should be targeted; a ‘broad based’ scaling back of patent rights is unlikely to be appropriate. Policies and institutions should facilitate more efficient licensing, promoting cumulative innovation without diluting the innovation incentives that patents provide.
Sharon Belenzon, Tuesday, July 3, 2012
According to the received wisdom, innovation is the heart-and-soul of modern growth but incentives to innovate are prone to the free-rider problem. This column partly supports that view. Looking at over 1,000 US companies it shows that internal citations of a firm's patents have a positive effect on market value while external citations have a negative effect.
Zhihong Yu , Markus Eberhardt, Christian Helmers, Tuesday, September 27, 2011
The number of domestic patent filings in China increased at an annual rate of 35% from 1999 to 2006. But the reasons behind this ‘patent explosion’ are unclear. By compiling a new dataset of 20,000 Chinese manufacturing firms, this column shows that the explosion has been ignited by the ICT sector.
Bas Straathof, Sander van Veldhuizen, Thursday, December 9, 2010
Barely 20% of European patents are validated in smaller EU member states – and this share is falling. This column argues that low validation rates are problematic for two reasons. They shelter firms from technological competition and they make a country less attractive to foreign innovators. It concludes that the introduction of the EU patent would solve these issues.
Bruno van Pottelsberghe de la Potterie, Jérôme Danguy, Wednesday, July 14, 2010
For more than 40 years, many governments and professional associations have acted, voted, or lobbied against the implementation of the EU patent. This column argues that the EU patent would drastically reduce patenting costs for applicants and generate more income for both the European Patent Office as well as most national offices, all the while saving €120 million in legal fees.
Bruno van Pottelsberghe de la Potterie, Malwina Mejer, Friday, April 10, 2009
The European Patent Office has offered a centralised examination service for the 34 member states of the European Patent Convention since the 1970s. However, once patents are granted by the EPO, there is no uniform system to enforce them. They must be validated and enforced by each member state. This column argues that the resulting uncertainty about the validity and market reach of patents reduces innovation.
John Van Reenen, Philippe Aghion, Luigi Zingales, Friday, March 20, 2009
This column explains how institutional investors can boost firm innovation. It shows that firms owned by institutional investors are granted more high-quality patents because institutional investors motivate managers to innovate via career concerns.
Alberto Galasso, Mark Schankerman, Saturday, November 29, 2008
The EU is considering two major policy initiatives to improve patent enforcement – patent litigation insurance and establishment of a centralised patent court. This column studies the US experience in centralising patent decisions and concludes that a European Patent Court would likely bring clarity to patent rights, making the market for innovation more efficient.
Mark Schankerman, Alberto Galasso, Sunday, August 31, 2008
The 'market for innovation' - the licensing and sale of patents - is one of the principal incentives for firms to invest in R&D. In CEPR DP 6946, Galasso and Schankerman set out to examine the impact that US developments have had on market efficiency, by studying the length of patent infringement disputes and find that the US system has performed surprisingly well in recent decades.
Bruno van Pottelsberghe de la Potterie, Gaétan de Rassenfosse, Sunday, June 1, 2008
Patent-based measures of innovation are often accused of reflecting the propensity to patent rather than actual research productivity. This column presents a better measure of patenting that reflects research productivity and identifies policies that affect research productivity and the propensity to patent.
Sudipto Bhattacharya, Sergei Guriev, Friday, November 9, 2007
Patenting has soared in recent decades, but much intermediate knowledge is protected by industrial secrecy, so relaxing patent protection must impact the secrecy option. Recent research suggests that the relationship between patent protection and knowledge transmission is hump-shaped and sector-specific. This suggests that patent protection standards should be sector-specific.
Antonio Cabrales, Thursday, June 21, 2007
Regulating prices in the pharmaceutical markets can be rather ineffective from a welfare-enhancing viewpoint and the US, despite its complaints, does not seem to have significantly higher prices than other countries with similar income levels.