|Title:||An Empirical Analysis of the Economics of Copyright: How Valid are the Results of Studies in Developed Countries for Developing Countries?|
|Citation:||Watt, Richard. An Empirical Analysis of the Economics of Copyright: How Valid are the Results of Studies in Developed Countries for Developing Countries?. The Economics of Intellectual Property (2009): 65.|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|About the Data|
|Data Description:||Using a literature review, this study compares copyright enforcement models using high levels of enforcement and using a low level of enforcement to inform research into appropriate levels for developing economies.|
|Data Type:||Secondary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||Yes|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
In this paper I attempt to provide a synopsis of the empirical literature, in the field of economics, concerning copyright. The paper is not intended to be a full literature survey, but rather attempts to identify the main areas that have been studied, and to offer an overview of what the literature says by means of an analysis of representative publications. The principal objective is to attempt to provide guidance to economists interested in undertaking empirical research on the economics of copyright, particularly in developing countries and countries with economies in transition. I shall attempt to provide an identification of areas for further research and suitable methodological approaches that could be followed by economists, especially in developing countries and countries with economies in transition, to study the economics of copyright empirically. To that end, the paper will address the following general topics: (1) papers dealing specifically with supply side effects (earnings from copyright royalties, the effect of copyright law on creativity, collective management of copyright); (2) papers dealing specifically with demand side effects (willingness to pay by consumers of copyright products, copyright infringement or piracy); (3) papers concerning emerging mechanisms for exercising rights over protected works. The paper concludes with a section that addresses directly the issue of copyright for developing countries.
Main Results of the Study
- Firms tend to employ different appropriability mechanisms. Sometimes they do it sequentially – e.g. an invention is protected by secrecy at a early stage and later on is patented – and at other times simultaneously – e.g. because an invention comprises many elements that can be protected through different appropriability tools.
- Lead time and secrecy seem to be the most relevant appropriability devices for most sectors and innovation types. Manufacturing and marketing capabilities – an appropriability mechanism which is not always considered in the studies surveyed – also provide a very relevant tool for protecting innovations.
- Large firms have a higher propensity to patent and they judge patents as a more effective appropriability method than do SMEs. However, this does not necessarily mean that, once they decide to apply for patents, they have more patents than SMEs (since some studies show that larger firms have more patents than patenting SMEs, while others fail to find that result).
- Although patents are not the most effective method for protecting innovations, many firms employ them anyway, be it jointly with other appropriability methods or not only as a means to protect their innovations but to achieve other objectives – i.e. “strategic patenting” (patent blocking, prevention of suits, reputation enhancing, cross-licensing, attracting venture capital, etc.).
- Disclosure and ease of inventing-around are the most important reasons for not patenting.
- Patents are more relevant as an appropriability mechanism for product than for process innovations and for some sectors such as chemicals (especially pharmaceuticals), some machinery industries and biotechnology.
- SMEs that display aggressive patent strategies often do not have the intention of exploiting their inventions but aim to license or sell them, among other factors, because they lack the production and marketing capabilities (complementary assets) needed for successfully commercializing these inventions.
- There seem to be “patenting clubs” among manufacturing firms. That is, firms that have more patents and/or perceive patents as an effective appropriability device, tend to have higher patent propensities – in other words, patenting decisions would be related to the firm’s patenting history and its perception of the strength of patents as a protection tool.
Policy Implications as Stated By Author
This paper reviews the empirical literature on the use of appropriability strategies, including the determinants of the propensity to patent, with a view to highlighting the main findings. It analyzes the strengths and weaknesses of the research that has been carried out so far on the subject and suggests a research agenda both for developed as well as for developing countries.
Coverage of Study
|Level of aggregation:||Copyright enforcement models|
|Period of material under study:||1998-2009|