Patent Protection and Innovation Over 150 Years

40 Pages Posted: 7 Jun 2002 Last revised: 14 Jul 2022

See all articles by Josh Lerner

Josh Lerner

Harvard Business School - Finance Unit; Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Private Capital Research Institute

Date Written: June 2002

Abstract

The paper seeks to understand the impact of the patent system on innovation by examining shifts in the strength of patent protection across sixty countries and a 150-year period. An examination of 177 policy changes reveals that strengthening patent protection appears to have few positive effects on patent applications by entities in the country undertaking the policy change, whether filings in Great Britain or the nation making the policy change are considered. Cross-sectional analyses suggest that the impact of patent protection-enhancing shifts were greater in nations with weaker initial protection and greater economic development, consistent with economic theory. I address concerns about the endogeneity of these changes by employing an instrumental variable approach.

Suggested Citation

Lerner, Josh, Patent Protection and Innovation Over 150 Years (June 2002). NBER Working Paper No. w8977, Available at SSRN: https://ssrn.com/abstract=315327

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