R&D and the Patent Premium

60 Pages Posted: 16 Jan 2003 Last revised: 29 Oct 2015

Ashish Arora

Duke University - Fuqua School of Business; National Bureau of Economics Research; Duke Innovation & Entrepreneurship Initiative

Marco Ceccagnoli

Scheller College of Business at Georgia Tech

Wesley M. Cohen

Duke University - Fuqua School of Business; Duke University - Department of Economics; National Bureau of Economic Research (NBER); Duke Innovation & Entrepreneurship Initiative

Date Written: January 2003

Abstract

We analyze the effect of patenting on R&D with a model linking a firm's R&D effort with its decision to patent, recognizing that R&D and patenting affect one another and are both driven by many of the same factors. Using survey data for the U.S. manufacturing sector, we estimate the increment to the value of an innovation realized by patenting it, and then analyze the effect on R&D of changing that premium. Although patent protection is found to provide a positive premium on average in only a few industries, our results also imply that it stimulates R&D across almost all manufacturing industries, with the magnitude of that effect varying substantially.

Suggested Citation

Arora, Ashish and Ceccagnoli, Marco and Cohen, Wesley M., R&D and the Patent Premium (January 2003). NBER Working Paper No. w9431. Available at SSRN: https://ssrn.com/abstract=368187

Ashish Arora

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

National Bureau of Economics Research

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

Marco Ceccagnoli

Scheller College of Business at Georgia Tech ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Wesley M. Cohen (Contact Author)

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-4072 (Phone)
919-681-6245 (Fax)

Duke University - Department of Economics

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

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