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The Diffusion of New Institutions: Evidence from Renaissance Venice's Patent System

49 Pages Posted: 14 Sep 2017  

Stefano Comino

Università degli Studi di Udine

Alberto Galasso

University of Toronto - Rotman School of Management; University of Toronto - Strategic Management

Clara Graziano

Università degli Studi di Udine - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Date Written: August 24, 2017

Abstract

What factors affect the diffusion of new economic institutions? This paper examines this question exploiting the introduction of the first regularized patent system which appeared in the Venetian Republic in 1474. We begin by developing a model which links patenting activity of craft guilds with provisions in their statutes. The model predicts that guild statutes that are more effective at preventing outsider’s entry and at mitigating price competition lead to less patenting. We test this prediction on a new dataset which combines detailed information on craft guilds and patents in the Venetian Republic during the Renaissance. We find a negative association between patenting activity and guild statutory norms which strongly restrict entry and price competition. We show that guilds which originated from medieval religious confraternities were more likely to regulate entry and competition, and that the effect on patenting is robust to instrumenting guild statutes with their quasi-exogenous religious origin. We also find that patenting was more widespread among guilds geographically distant from Venice, and among guilds in cities with lower political connection which we measure exploiting a new database on noble families and their marriages with members of the great council. Our analysis suggests that local economic and political conditions may have a substantial impact on the diffusion of new economic institutions.

Keywords: patents, competition, guilds, institutions

JEL Classification: O330, O340, K230

Suggested Citation

Comino, Stefano and Galasso, Alberto and Graziano, Clara, The Diffusion of New Institutions: Evidence from Renaissance Venice's Patent System (August 24, 2017). CESifo Working Paper Series No. 6612. Available at SSRN: https://ssrn.com/abstract=3035727

Stefano Comino

Università degli Studi di Udine ( email )

Via Tarcisio Petracco, Palazzo antonini, 8
Udine, 33100
Italy

Alberto Galasso

University of Toronto - Strategic Management ( email )

105 St George Street
Toronto, ON M5S 1L2
Canada

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

HOME PAGE: http://www.rotman.utoronto.ca/facbios/viewFac.asp?facultyID=alberto.galasso

Clara Graziano (Contact Author)

Università degli Studi di Udine - Department of Economics ( email )

Via Tomadini 30
33100 Udine
Italy
+0432+249216 (Phone)
+0432+249229 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

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