Patents and Research Investments: Assessing the Empirical Evidence
9 Pages Posted: 20 Jan 2016 Last revised: 24 Apr 2022
Date Written: January 2016
Abstract
A well-developed theoretical literature — dating back at least to Nordhaus (1969) — has analyzed optimal patent policy design. We re-present the core trade-off of the Nordhaus model and highlight an empirical question which emerges from the Nordhaus framework as a key input into optimal patent policy design: namely, what is the elasticity of R&D investment with respect to the patent term? We then review the — surprisingly small — body of empirical evidence that has been developed on this question over the nearly half century since the publication of Nordhaus's book.
Suggested Citation: Suggested Citation
Budish, Eric B. and Roin, Benjamin N. and Williams, Heidi L., Patents and Research Investments: Assessing the Empirical Evidence (January 2016). NBER Working Paper No. w21889, Available at SSRN: https://ssrn.com/abstract=2717300
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