The Strategic Effects of Trademark Protection

• 成果类型: Article
• 署名作者: Heath, Davidson; Mace, Christopher
• 署名单位: Utah System of Higher Education; University of Utah
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhz084
• 发表日期: 2020
• 页码: 1848
• 关键词: DILUTION ACT; SHAREHOLDER VALUE; entry deterrence; market value; INNOVATION; QUALITY; BEHAVIOR; returns; patents; LESSONS

摘要

We study the effects of trademark protection on firms' profits and strategy using the 1996 Federal Trademark Dilution Act, which granted additional legal protection to selected trademarks. We find that the FTDA raised treated firms' operating profits and was followed by a spike in trademark lawsuits and lower entry and exit in affected product markets. Treated firms reduced R&D spending, produced fewer patents and new products, and recalled a higher number of unsafe products. Our results suggest that stronger trademark protection negatively affected innovation and product quality.