Patent Protection, Market Uncertainty, and R&D Investment
Centre for European Economic Research (ZEW); Catholic University of Leuven (KUL)
Andrew A. Toole
U.S. Department of Agriculture
ZEW - Centre for European Economic Research Discussion Paper No. 06-056
The real options investment theory shows that greater uncertainty about market revenues reduces current R&D investment by increasing the value of waiting. This paper presents empirical evidence that patent protection mitigates the effect market uncertainty on R&D investment.
Number of Pages in PDF File: 11
Keywords: Real Options Theory, Uncertainty, R&D, Intellectual Property Protection, Censored Regression
JEL Classification: O31, O33, C25working papers series
Date posted: August 22, 2006 ; Last revised: August 26, 2008
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