Does Compulsory Licensing Discourage Invention? Evidence from German Patents after Wwi

56 Pages Posted: 10 Aug 2015 Last revised: 2 Sep 2015

See all articles by Joerg Baten

Joerg Baten

University of Tuebingen

Nicola Bianchi

Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER)

Petra Moser

NYU Stern Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: July 2015

Abstract

This paper investigates whether compulsory licensing – which allows governments to license patents without the consent of patent-owners – discourages invention. Our analysis exploits new historical data on German patents to examine the effects of compulsory licensing under the US Trading-with-the-Enemy Act on invention in Germany. We find that compulsory licensing was associated with a 28 percent increase in invention. Historical evidence indicates that, as a result of war-related demands, fields with licensing were negatively selected, so OLS estimates may underestimate the positive effects of compulsory licensing on future inventions.

Suggested Citation

Baten, Joerg and Bianchi, Nicola and Moser, Petra, Does Compulsory Licensing Discourage Invention? Evidence from German Patents after Wwi (July 2015). NBER Working Paper No. w21442. Available at SSRN: https://ssrn.com/abstract=2641658

Joerg Baten (Contact Author)

University of Tuebingen ( email )

Wilhelmstr. 19
72074 Tuebingen, Baden Wuerttemberg 72074
Germany

Nicola Bianchi

Northwestern University - Kellogg School of Management ( email )

2211 Campus Drive
Evanston, IL 60208
United States

HOME PAGE: http://www.bianchinicola.com

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Petra Moser

NYU Stern Department of Economics ( email )

44 West 4th Street
New York, NY 10003
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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