Date: 2018
Type: Working Paper
The impact of patent protection and financial development on industrial R&D
Working Paper, EUI RSCAS, 2018/37, Global Governance Programme-312, [Global Economics]
MASKUS, Keith E., MILANI, Sahar, NEUMANN, Rebecca, The impact of patent protection and financial development on industrial R&D, EUI RSCAS, 2018/37, Global Governance Programme-312, [Global Economics] - https://hdl.handle.net/1814/56264
Retrieved from Cadmus, EUI Research Repository
Stronger protection of patent rights is thought to spur innovation through securing returns to R&D investments. Those investments must be financed, however, suggesting that the responsiveness of R&D to patent reforms varies with financial development levels. We examine the joint impact of domestic and international financial-market development and patent protection on R&D intensities in 22 manufacturing industries in 20 OECD countries for the period 1990-2009. We show that stronger patent rights increase R&D intensities in patent-intensive industries, accounting for the need for external financing and the amount of tangible assets. The primary impact varies across types of financial development: patent protection raises R&D in high-patent industries where countries have more limited equity and credit markets. In contrast, in countries with more developed bond markets industry R&D is more sensitive to patent rights. Interestingly, patent rights in countries that are more exposed to foreign direct investment increase R&D intensities at all levels of financial development.
Cadmus permanent link: https://hdl.handle.net/1814/56264
ISSN: 1028-3625
Series/Number: EUI RSCAS; 2018/37; Global Governance Programme-312; [Global Economics]
Keyword(s): R&D Financial development Patent protection F36 G10 G15 O16 O30 P14
Other topic(s): Economic development Regulation and economic policy