Evaluating The Forward Citations-Patent Value Relationship: The Role Of Competition
By Neelesh T. Moorthy
I assess whether forward citations—how often patents are cited by subsequent patents—reliably capture patent quality. A high-quality invention might lack forward citations if there are no competing, patenting firms. This introduces measurement error in using citations to measure patent value. I test whether greater competition makes forward citations better measures of patent quality, with eight and twelve-year patent renewal rates serving as my benchmark measures of patent quality. Patent data come from the manufacturing survey in Cohen, Nelson, and Walsh (2000). I conduct logit regressions of patent renewal on forward citations and the number of competitors faced by surveyed manufacturing labs. While the regression results do not support the competition hypothesis, they confirm that forward citations positively predict renewal. They also lend insight into firms’ strategic renewal decisions.
Advisors: Wesley Cohen and Michelle Connolly | JEL Codes: O31, O34
What Fosters Innovation? A CrossSectional Panel Approach to Assessing the Impact of Cross Border Investment and Globalization on Patenting Across Global Economies
By Michael Dessau and Nicholas Vega
This study considers the impact of foreign direct investment (FDI) on innovation in high income, uppermiddle income and lowermiddle income countries. Innovation matters because it is a critical factor for economic growth. In a panel setting, this study assesses the degree to which FDI functions as a vehicle for innovation as proxied by scaled local resident patent applications. This study considers research and development (R&D), domestic savings, imports and exports, and quality of governance as factors which could also impact the effectiveness of FDI on innovation. Our results suggest FDI is most effective as inward direct investment in countries outside the technological frontier possessing adequate existing domestic investment capital and R&D spending to convert foreign investment capital and technological spillover into innovation. Nonetheless, FDI was not a consistent indicator for innovation; rather, the most consistent indicators across this study were R&D and domestic savings. Differences amongst income groups are highlighted as well as their varying responses to our array of causal factors.
Advisor: Lori Leachman, Grace Kim, Michelle Connolly | JEL Codes: A10, B22, C82, E00, E02, O10, O11, O30, O31, O32, O33, O34, O43
An Empirical Study of the Anticommons Effect on Public vs. Private Researchers
by Serena S. Lam
Abstract
The “anticommons effect” is a recently coined term to describe the phenomenon of stifled research and innovation in the biomedical research arena due to the growing number of overlapping patents in particular domains. Murray and Stern (2005) was the first to devise a novel strategy to quantify this effect by looking at the citation trend of papers with patented findings compared to that of non-patented ones published in Nature Biotechnology. This study continues this vein of research by looking at the differential anticommons effect on public vs. private sector researchers by dividing the citations of the articles used in Murray and Stern (2005) into public and private sector citations, and running a negative binomial fixed effects regression through both groups. Similarly, the citations were also divided into high vs. low tier journals, US vs. foreign authors, and scholarly vs. non-scholarly citations for further analysis. It was found that public sector citations dropped by 19.53% for patented articles compared to non-patented papers, while no such effect was found for private sector citations, suggesting that the anticommons effect is salient primarily for public sector researchers. A significant anticommons effect was also found for low tier journal citations (22.25%), US (15.96%) and foreign authored citations (21.72%), and for scholarly citations (17.26%) as measured by the average decrease in yearly citation rates for patented papers.
Professor Paul Ellickson, Faculty Advisor
JEL Codes: I23, O34,
