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Technology entry in the presence of patent thickets

Author

Listed:
  • Bronwyn H. Hall

    (Institute for Fiscal Studies and University of California, Berkeley)

  • Christian Helmers

    (Institute for Fiscal Studies and Santa Clara University)

  • Georg von Graevenitz

    (Institute for Fiscal Studies and Queen Mary University of London)

Abstract

We analyze the effect of patent thickets on entry into technology areas by firms in the UK. We present a model that describes incentives to enter technology areas characterized by varying technological opportunity, complexity of technology, and the potential for hold-up in patent thickets. We show empirically that our measure of patent thickets is associated with a reduction of first time patenting in a given technology area controlling for the level of technological complexity and opportunity. Technological areas characterized by more technological complexity and opportunity, in contrast, see more entry. Our evidence indicates that patent thickets raise entry costs, which leads to less entry into technologies regardless of a firm’s size.

Suggested Citation

  • Bronwyn H. Hall & Christian Helmers & Georg von Graevenitz, 2016. "Technology entry in the presence of patent thickets," IFS Working Papers W16/02, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:16/02
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    References listed on IDEAS

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    1. Georg Graevenitz & Stefan Wagner & Dietmar Harhoff, 2013. "Incidence and Growth of Patent Thickets: The Impact of Technological Opportunities and Complexity," Journal of Industrial Economics, Wiley Blackwell, vol. 61(3), pages 521-563, September.
    2. Christian Helmers & Mark RogersPhilipp Schautschick, 2011. "Intellectual Property at the Firm-Level in the UK: The Oxford Firm-Level Intellectual Property Database," Economics Series Working Papers 546, University of Oxford, Department of Economics.
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    Cited by:

    1. Gaétan de Rassenfosse & Kyle Higham, 2024. "Decentralising the patent system," Chapters, in: Walter G. Park (ed.), Handbook of Innovation and Intellectual Property Rights, chapter 8, pages 120-138, Edward Elgar Publishing.
    2. de Rassenfosse, Gaetan & Higham, Kyle, 2019. "Decentralising the Patent System," SocArXiv qzmf8, Center for Open Science.
    3. Coad, Alex & Kaiser, Ulrich & Kuhn, Johan, 2021. "Spin doctors vs the spawn of capitalism: Who founds university and corporate startups?," Research Policy, Elsevier, vol. 50(10).
    4. Ufuk Akcigit & Sina T. Ates, 2021. "Ten Facts on Declining Business Dynamism and Lessons from Endogenous Growth Theory," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(1), pages 257-298, January.
    5. NAGAOKA Sadao & NISHIMURA Yoichiro, 2014. "Complementarity, Fragmentation, and the Effects of Patent Thickets," Discussion papers 14001, Research Institute of Economy, Trade and Industry (RIETI).
    6. Dan Prud’homme & Tony W. Tong, 2024. "Rethinking firm-specific advantages from intellectual property rights: Boundary conditions for MNEs," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 55(1), pages 91-109, February.
    7. Robin Cowan & Nicolas Jonard & Ruth Samson, 2024. "Strategies of search and patenting under different IPR regimes," Working Papers of BETA 2024-20, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    8. Katrin Hussinger & Wunnam Basit Issah, 2022. "Trade Secret Protection and R&D Investment of Family Firms," DEM Discussion Paper Series 22-11, Department of Economics at the University of Luxembourg.
    9. Scott, Peter & Spadavecchia, Anna, 2023. "Patents, industry control, and the rise of the giant American corporation," Research Policy, Elsevier, vol. 52(1).
    10. Yun Hou & I.P.L. Png & Xi Xiong, 2023. "When stronger patent law reduces patenting: Empirical evidence," Strategic Management Journal, Wiley Blackwell, vol. 44(4), pages 977-1012, April.
    11. Oliver Kovacs, 2019. "Big IFs in Productivity-Enhancing Industry 4.0," Social Sciences, MDPI, vol. 8(2), pages 1-17, January.
    12. Gaétan De Rassenfosse & Paul H. Jensen & T'Mir Julius & Alfons Palangkaraya & Elizabeth Webster, 2023. "Is the Patent System an Even Playing Field? The Effect of Patent Attorney Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 71(1), pages 124-142, March.
    13. Mukund Chari & H. Kevin Steensma & Charles Connaughton & Ralph Heidl, 2022. "The influence of patent assertion entities on inventor behavior," Strategic Management Journal, Wiley Blackwell, vol. 43(8), pages 1666-1690, August.
    14. Hussingera, Katrin & Issahd, Wunnam, 2022. "Trade secret protection and R&D investment of family firms," ZEW Discussion Papers 22-039, ZEW - Leibniz Centre for European Economic Research.
    15. Ben Vermeulen & Andreas Pyka, 2018. "The Role of Network Topology and the Spatial Distribution and Structure of Knowledge in Regional Innovation Policy: A Calibrated Agent-Based Model Study," Computational Economics, Springer;Society for Computational Economics, vol. 52(3), pages 773-808, October.
    16. Po-Hsuan Hsu & Hsiao-Hui Lee & Tong Zhou, 2022. "Patent Thickets, Stock Returns, and Conditional CAPM," Management Science, INFORMS, vol. 68(11), pages 8343-8367, November.
    17. Dietl, M & Skrok & Benalcazar, P & Gątkowski, M & Rockett, K, 2017. "Pendency and Thickets," Economics Discussion Papers 19979, University of Essex, Department of Economics.
    18. Arianna Martinelli & Julia Mazzei & Daniele Moschella, 2022. "Patent disputes as emerging barriers to technology entry? Empirical evidence from patent opposition," LEM Papers Series 2022/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    19. Cui, Chuantao & Li, Leona Shao-Zhi, 2023. "Trade policy uncertainty and new firm entry: Evidence from China," Journal of Development Economics, Elsevier, vol. 163(C).

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    More about this item

    Keywords

    IPR; patents; entry; technological opportunity; technological complexity; hold-up;
    All these keywords.

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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