Sequential innovation, patent policy, and the dynamics of the replacement effect

• 成果类型: Article
• 署名作者: Parra, Alvaro
• 署名单位: University of British Columbia
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12287
• 发表日期: 2019
• 页码: 568-590
• 关键词: intellectual property-rights; market-structure; PROTECTION; COMPETITION; MODEL; patentability; persistence; GROWTH; length; LIFE

摘要

I study how patent policy-characterized by patent length and forward protection-affects Research and Development (R&D) dynamics, leadership persistence, and market structure. Firms' R&D investments increase as the patent's expiration date approaches. Through forward protection, followers internalize the leader's replacement effect. In protective systems, this internalization is substantial, reversing Arrow's traditional result: followers invest less than leaders at every moment of the patent's life. I study the policy that maximizes innovative activity. Overly protective policies decrease innovation pace through two mechanisms: delaying firms' investments toward the end of the patent's life and decreasing the number of firms performing R&D.