An Empirical Analysis of the Effects of Patents and Secrecy on Knowledge Spillovers
31 Pages Posted: 27 Jul 2006 Last revised: 25 May 2014
Date Written: 2006
Abstract
Theoretical considerations suggest that secrecy reduces spillovers almost completely through non-disclosure, while the disclosure requirement of patents generates some spillover and at the same time allows firms to appropriate knowledge. In this paper we empirically analyze whether protection by secrecy or protection by patents is associated with lower knowledge spillovers. Since the amount of knowledge spillovers is hard to measure directly, we look at the impact of the usage of protection methods in an industry on the innovation activities of firms using external knowledge. One goal is to assess if firms have moved to a more open innovation business model, i.e. allow more knowledge spillovers to occur despite using protection methods. Our estimations show that the usage of both, patents and secrecy, hinders the innovation activities of firms through the reduction of spillovers to firms in their own industry. We conclude that the appropriability effect of patents outweighs the disclosure effect. We also find some evidence that the open innovation business model has not been implemented widely.
Keywords: Knowledge Spillovers, patents, secrecy, open innovation, ordered probit
JEL Classification: O34, O31, D83
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Cost-Reducing and Demand-Creating R&D with Spillovers
By Richard C. Levin and Peter C. Reiss
-
R&D Cooperation between Firms and Universities: Some Empirical Evidence from Belgian Manufacturing
-
Complementarity in R&D Cooperation Strategies
By René Belderbos, Martin A. Carree, ...
-
Japanese Research Consortia: A Microeconometric Analysis of Industrial Policy
By Lee Branstetter and Mariko Sakakibara
-
Endogenizing Know-How Flows Through the Nature of R&D Investments
By Bruno Cassiman, David Pérez-castrillo, ...
-
Endogeneizing Know-How Flows Through the Nature of R&D Investments
By Bruno Cassiman, David Pérez-castrillo, ...
-
The Influence of Federal Laboratory R&D on Industrial Research
By James D. Adams, Eric P. Chiang, ...