Weak Intellectual Property Rights, Research Spill-Overs and The Incentive to Innovate

American Review of Law and Economics, Forthcoming

36 Pages Posted: 30 Apr 2011 Last revised: 18 Jan 2014

Date Written: October 30, 2010

Abstract

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.

Keywords: innovation, exclusive rights, patents, trade secrets, spill-overs

JEL Classification: K1, D4, L4

Suggested Citation

Denicolo, Vincenzo and Franzoni, Luigi Alberto, Weak Intellectual Property Rights, Research Spill-Overs and The Incentive to Innovate (October 30, 2010). American Review of Law and Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1825045

Vincenzo Denicolo

University of Bologna ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Luigi Alberto Franzoni (Contact Author)

University of Bologna ( email )

P.zza Scaravilli 2
Bologna, 40124
Italy
0512098488 (Phone)
+39-051-221968 (Fax)

HOME PAGE: https://www.unibo.it/sitoweb/luigi.franzoni/en

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