Weak Intellectual Property Rights, Research Spill-Overs and The Incentive to Innovate
University of Bologna
Luigi A. Franzoni
University of Bologna - School of Economics, Management, and Statistics
October 30, 2010
American Review of Law and Economics, Forthcoming
We investigate the conditions for the desirability of exclusive intellectual property rights for innovators, as opposed to weak rights allowing for some degree of imitation and ex-post competition. The comparison between the two alternatives reduces to a specific "ratio test," which suggests that strong, exclusive IP rights are preferable when competition from potential imitators is weak, the innovation attracts large R&D investments, and research spill-overs are small.
Number of Pages in PDF File: 36
Keywords: innovation, exclusive rights, patents, trade secrets, spill-overs
JEL Classification: K1, D4, L4
Date posted: April 30, 2011 ; Last revised: January 18, 2014
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