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The heterogeneous effect of software patents on expected returns: Evidence from India

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Listed:
  • Eberhardt, Markus
  • Fafchamps, Marcel
  • Helmers, Christian
  • Patnam, Manasa

Abstract

We contribute to the literature on the role of patenting for economic development by analyzing the impact of patent protection for software in India. We find that a proposed broadening of patent eligibility to include software in 2004 had a large positive effect on average returns for listed software companies in India. An unanticipated reversal of this proposed policy change in 2005 resulted in substantial negative returns. We illustrate substantial heterogeneity in the dynamics of these effects across the sequence of events. We also find smaller firms to have been systematically and most significantly affected by the tightening of patent law with regard to software patents.

Suggested Citation

  • Eberhardt, Markus & Fafchamps, Marcel & Helmers, Christian & Patnam, Manasa, 2016. "The heterogeneous effect of software patents on expected returns: Evidence from India," Economics Letters, Elsevier, vol. 145(C), pages 73-78.
    • Handle: RePEc:eee:ecolet:v:145:y:2016:i:c:p:73-78
    DOI: 10.1016/j.econlet.2016.05.016
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    References listed on IDEAS

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    More about this item

    Keywords

    Patents; Software; Innovation; India;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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