Patents and Research Investments: Assessing the Empirical Evidence

Citation: Eric Budish, Benjamin N. Roin, Heidi L. Williams (2016) Patents and Research Investments: Assessing the Empirical Evidence. Amercan Economic Review (RSS)
DOI (original publisher): 10.1257/aer.p20161091
Semantic Scholar (metadata): 10.1257/aer.p20161091
Sci-Hub (fulltext): 10.1257/aer.p20161091
Internet Archive Scholar (search for fulltext): Patents and Research Investments: Assessing the Empirical Evidence
Download: https://economics.mit.edu/files/12529
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Summary

Describes Nordhaus 1969 model on optimal patent length. Key is estimating elasticity of research investments with regard to patent term. We have "essentially no credible empirical evidence" on this elasticity. Describes two broad ways of estimating: variation due to changes in laws, and variation due to other differences (e.g. effective term longer for drugs requiring shorter trials), and complications (e.g. small country patent laws don't impact global incentives much, other changes often brought by same treaties; don't know how much of variation is due to difference in effective patent term).

Theoretical and Practical Relevance

Goal is to promote understanding of theory so to encourage more empirical research.