exchange rate regimes and the international transmission of business cycles capital account openness matters abstract we investigate the role of exchange rate regimes in the international transmission of business cycles during the global financial crisis we find that exchange rate regimes alone did not account for differences in the international transmission of business cycles during the crisis however analysis considering capital account openness and countries with currencies pegged to the u s dollar indicates that exchange rate regimes play an important role in shaping business cycle co movement adopting a fixed regime with high capital account openness additionally increased business cycle co movement with the united states during the crisis whereas u s dollar peggers with relatively restrictive capital accounts during the crisis were not found to affect business cycle transmission

to float or to fix evidence on the impact of exchange rate regimes on growth we study the relationship between exchange rate regimes and economic growth for a sample of 183 countries over the post bretton woods period using a new de facto classification of regimes based on the actual behavior of the relevant macroeconomic variables in contrast with previous studies we find that for developing countries less flexible exchange rate regimes are associated with slower growth as well as with greater output volatility for industrial countries regimes do not appear to have any significant impact on growth the results are robust to endogeneity corrections and a number of alternative specifications borrowed from the growth literature

a political economy model of congressional careers our main goal is to quantify the returns to a career in the united states congress we specify a dynamic model of career decisions of a member of congress and estimate this model using a newly collected dataset given estimates of the structural model we assess reelection probabilities estimate the effect of congressional experience on private and public sector wages and quantify the value of congressional seat moreover we assess how an increase in the congressional wage or the imposition of term limits would affect the career decisions of politicians and the returns from a career in congress

how to best ensure remuneration for creators in the market for music copyright and its alternatives the focus of this essay is to examine the market for copyrighted works with a particular emphasis on the sound recording market this market is currently in a state of flux some would say disarray due to the ability of the internet to lower transmission costs for both authorized and unauthorized copies with the latter being at this time far more prevalent in this essay we discuss the intent of copyright the role of copying and file sharing and some alternative production consumption schemes meant to strengthen or to replace copyright

section 337 and the protection of intellectual property in the united states the complainants and the impact under section 337 of the tariff act of 1930 a firm can challenge imports that infringe its u s intellectual property rights such as patents copyrights and trademarks based on publicly available information this paper examines the characteristics of firms that file complaints under section 337 and also evaluates how firms are affected by the outcomes we find a complaining firm compared with peer firms in the same industry is typically larger produces a more diverse range of products has invested more in intangibles and is no less profitable a finding of no violation significantly depresses the filing firm s profits compared to peers section 337 appears to protect innovators but its effectiveness in promoting more innovation cannot be demonstrated so clearly copyright 1996 by mit press

the structure of licensing contracts industrial organization theory has explored several issues related to licensing but empirical analyses are extremely rare we amass a new and detailed dataset on licensing contracts and use it to present some simple facts concerning licensing behavior our analysis reveals robust cross industries differences in several contractual features such as exclusivity cross licensing ex ante versus ex post technology transfers and licensing to related versus unrelated parties we offer an interpretation of these facts based on cross industry variation in the strength of intellectual property rights

a general equilibrium analysis of software development implications of copyright protection and contract enforcement abstract we develop a general equilibrium model to study the implications of a legal environment on the organization of software production we show that contract enforcement determines the organizational mode i e in house versus outsourcing of customized software development while copyright protection affects both packaged software as well as customized software development we obtain some testable results when copyright protection is weak only customized software will be developed when copyright protection is strong both customized software and packaged software will be developed environment changes in one software market affect the equilibrium in the other software market

the role of market forces in assuring contractual performance the conditions under which transactors can use the market repeat purchase mechanism of contract enforcement are examined increased price is shown to be a means of assuring contractual performance a necessary and sufficient condition for performance is the existence of price sufficiently above salvageable production costs so that the nonperforming firm loses a discounted steam of rents on future sales which is greater than the wealth increase from nonperformance this will generally imply a market price greater than the perfectly competitive price and rationalize investments in firm specific assets advertising investments thereby become a positive indicator of likely performance

limits to database protection fair use and scientific research exemptions a trend running diametrically opposed to the expansion of intellectual property rights ipr is the increasing awareness that dominant positions sustained by ipr may be mitigated through exemptions and statutory or compulsory licences it is argued that there are compelling economic reasons to protect valuable assets that are prone to copying but that there are equally compelling reasons to limit monopolistic claims and stimulate cross licensing practices compulsory licensing may serve as a stimulus to the bargaining process with private parties and research institutions alike another important category of information is public sector information access to information has become a concern and the european commission has followed up on its green paper on public sector information in the information society with a directive implementing its vision on affordable access for all and exploitation potential the right of access to information may be enforced through the european convention on human rights it not only guarantees the freedom of speech it also recognises the freedom to receive information

patenting in the shadow of competitors this article empirically examines the patenting behavior of new biotechnology firms that have different litigation costs i show that firms with high litigation costs are less likely to patent in subclasses with many other awards particularly those of firms with low litigation costs this pattern is consistent with the literature on costly litigation which suggests that firms that have high litigation costs will take greater precautions to avoid litigation these results are robust to a variety of control variables and modifications that seek to test alternative explanations

tilting the table the use of preliminary injunctions abstract this paper examines the economic role of preliminary injunctions in legal disputes we present a model in which differences in financing costs drive the use of preliminary injunction and explore the implications of this legal remedy for ex post efficiency and ex ante incentives controlling for the nature of the dispute we examine the relationships between the financial status of litigating parties and whether a preliminary injunction is requested the empirical analysis uses detailed data compiled for a sample of 252 patent suits and reveals patterns generally consistent with those suggested by the model

strategizing by firms in the presence of markets for resources strategizing by firms from the resource based view is concerned with the process through which firms acquire a distinctive bundle of resources that is costly and time consuming for competitors to duplicate or imitate a central question facing any firm therefore is its strategy for accumulating the resources that underpin its production activities in this article the process of resource accumulation is discussed as one involving potentially both internal resource development and external resource acquisition from the perspective of the strategic issues involved in making a choice between these options emerging markets for technologies and know how through licensing and other forms of resource exchange have opened up new avenues through which firms may jostle for advantage the article is concerned with three major aspects of this process illustrating the discussion with cases from biotechnology and pharmaceuticals first the strategizing by firms around the internal development vs external sourcing issue is discussed as informed by the practices of leading firms and how these lend greater variety of strategic options for firms second the potential competitive advantages as well as disadvantages to be secured by firms through the process of external sourcing as compared with the well known potential advantages accruing to incumbents through internal development such as time compression diseconomies and causal ambiguity and third the criteria to be used by firms to strategically evaluate resources individually as contrasted with the strategic evaluation of the resource bundle or totality these criteria it is argued turn on the issues of marginal value contribution resource complementarities and synergies resource variety and transferability involving intellectual property issues successful firms it is argued expand their options through blending internal resource accumulation with external resource leverage thereby deepening their distinctive dynamic capabilities this approach extends the framework of the rbv enabling it to encompass resource driven schumpeterian competition and such aspects of industrial dynamics as specialization modularization and imitative challenge copyright 2003 oxford university press

global markets for technology evidence from patent transactions abstract the paper analyses the recent evolution of international markets for technology by examining changes in ownership of us granted patents we study the effects of the geographical origin of patents proxied by their first priority country on the probability of patents being traded on the timing of the transaction and on the probability of observing a cross border transaction while controlling for the characteristics of the patents the time and sector specificities the analyses are based on a comprehensive dataset that covers all the patents granted by the uspto over the 2002 2012 period the data from the us patent reassignment database have been cleaned and processed and a subset of 95 542 granted patents that have been traded has been identified we obtain evidence from survival models that there has been an increase in the rate of patent transactions in recent years the obtained results indicate that patents with a first non us original applicant have less probability of being traded and show a longer time to transaction than us first priority patents we also find that more science based patents which are usually characterized by a higher technological uncertainty are more likely to be traded but are much less likely to be involved in cross border deals the results are discussed in light of the impact of asymmetric information and search costs on international patent transactions

intellectual property litigation activity in the usa abstract brand names or trademarks carry incredible economic power and prestige there is increasing recognition by world bodies that intellectual property ip whether manifested in patents trademarks copyrights or trade secrets is highly valuable and must be protected through robust ip enforcement the usa is an interesting natural laboratory as patent trademark and copyright litigation battles have been raging domestically for some time the paper discusses the four main forms of ip assets the legal remedies that are available to enforce the property rights inherent in each type of ip asset the basic damages theory relating to each form of ip and how damages may be calculated when each type of asset is presumed to be infringed the increased recognition of the value of ip has led to stronger enforcement of ip protection an increase in ip litigation and growing policy actions that are focused on how that protection should be manifested an empirical analysis of how the ip litigation activity in the usa has changed over time is also presented

which foreign states support the global use of the chinese renminbi the international political economy of currency internationalisation the internationalisation of the chinese renminbi has taken a path distinct from most cases involving previous international currencies in that policy measures adopted by governments have played crucial roles in it this paper conducts a cross country analysis of the factors that have led foreign governments to introduce three primary policy infrastructures to support renminbi use renminbi swap lines renminbi qualified foreign institutional investor quotas and renminbi clearing banks our analysis shows that a state holding renminbi assets among its reserves or having more developed financial markets is likely to establish a higher level of policy infrastructure supporting renminbi use we also find that a country s economic and political relations with china may have meaningful impacts on the level of its establishment of those renminbi related policy infrastructures these findings significantly expand our understanding of renminbi internationalisation by identifying which non chinese factors have affected its progress to date they also contribute meaningfully to the literature on currency internationalisation and international currencies in general by calling attention to the roles of foreign states in the process of a currency s internationalisation

an introduction to the law and economics of intellectual property although economists have written on topics of intellectual property for a long time the impact of economics on public policy in this area has been slight especially as compared to the influence of professional writings in areas such as antitrust and taxation we believe that too few of the profession s resources have been devoted to these issues and that of those resources that have been employed too few have been devoted to empirical analyses we hope that this introductory essay and the three papers that follow will stimulate interest in this subject this introductory essay first describes some of the basic economic tradeoffs involved in intellectual property law and then describes the framework of the law in the six areas described above patent copyright semiconductor protection trademark trade secret and misappropriation it is intended both to provide thumbnail descriptions of the various intellectual property regimes to economists working in this area and to indicate where additional economic research might be useful

capture and ideology in the economic theory of politics the economic theory of regulation long ago put public interest theories of politics to rest these theories have correctly been viewed as normative wishings rather than explanations of real world phenomena they have been replaced by models of political behavior that are consistent with the rest of microeconomics anthony downs 1957 james buchanan and gordon tullock 1965 george stigler 1971 sam peltzman 1976 recently however debate has arisen over whether some version of a public interest theory of regulation will have to be readmitted to our thinking about actions and results in the political arena what is at issue is the empirical importance of the altruistic publicly interested goals of rational actors in determining legislative and regulatory outcomes james kau and paul rubin 1979 kalt 1981 peltzman 1982 this study assesses the nature and significance of publicly interested objectives in a particular instance of economic policymaking u s senate voting on coal strip mining regulations the existence of such objectives is of course no contradiction of the economic view of human behavior kenneth arrow 1972 gary becker 1974 and may well be rooted in genetic biological history becker 1976 jack hirshleifer 1978 generally however individuals altruistic publicly interested goals have been given little attention this reflects the judgment that such goals are so empirically unimportant as to allow the use of occam s razor in positive models or well founded apprehensions that these goals are unusually difficult to identify measure and analyze notwithstanding the latter problem we find that approaches which confine themselves to a view of political actors as narrowly egocentric maximizers explain and predict legislative outcomes poorly the tracking and dissecting of the determinants of voting on coal strip mining policy suggest that the economic theory of politics has been prematurely closed to a broader conception of political behavior

the effect of trade secret legal protection on venture capital investments evidence from the inevitable disclosure doctrine abstract this study investigates how the inevitable disclosure doctrine a form of trade secret legal protection affects venture capital vc investment using a data set of vc deals realized in the united states from 1980 to 2012 we find that a rule in favor of inevitable disclosure increases the amount of vc investment we address mechanisms that can explain these findings by assessing how the inevitable disclosure doctrine a displays a different impact on vc investments according to the characteristics of the state and the industry where the start ups operate and b affects the performance of vc backed firms we also discuss managerial and policy implications of our findings

inflation targeting as a shock absorber abstract we study the characteristics of inflation targeting as a shock absorber using quarterly data for a large panel of countries to overcome an endogeneity problem between monetary regimes and the likelihood of crises we propose to study large natural disasters we find that inflation targeting improves macroeconomic performance following such exogenous shocks it lowers inflation raises output growth and reduces inflation variability compared to alternative monetary regimes this performance is mostly due to a different response of monetary policy and fiscal policy under inflation targeting finally we show that only hard but not soft targeting reaps the rewards deeds not words matter for successful monetary stabilization

patents as negotiating assets patenting versus secrecy for startups we analyse a sequential innovation model and show that relatively narrow patent rights can facilitate a market in which startups patents are traded as negotiating assets in this market the trade of patents on top of monopoly profits conveys an extra surplus from the patents capacity to affect future tech transfer negotiations this surplus which stems from a patent s potential ability to exclude infringers and the corresponding enforcement spillovers that patents confer may incentivise innovations that would not have been possible under trade secrecy improving social welfare this article is protected by copyright all rights reserved

protecting intellectual property rights are small firms handicapped this paper studies the determinants of patent suits and settlements during 1978 99 by linking information from the u s patent office the federal courts and industry sources we find that litigation risk is much higher for patents that are owned by individuals and firms with small patent portfolios patentees with a large portfolio of patents to trade or other characteristics that facilitate cooperative resolution of disputes are much less likely to prosecute infringement suits however postsuit outcomes do not depend on these characteristics these findings show that small patentees are at a significant disadvantage in protecting their patent rights because their greater litigation risk is not offset by more rapid resolution of their suits our empirical estimates of the heterogeneity in litigation risk can help in developing private patent litigation insurance to mitigate the adverse affects of high enforcement costs

timing and payoff of patent purchases the role of firm size and composition while large pharmaceutical companies continue to dominate drug development and patent acquisition their timing of drug patent acquisition and subsequent payoffs remain poorly understood we analys

the effects of increased copyright protection an analytic approach previous authors who have considered partially nonexcludable goods have claimed that an increase in copyright protection will have the following two effects on social welfare first it will decrease the social welfare loss due to underproduction second it will increase the social welfare loss due to underutilization in this paper we investigate these claims in a formal setting by analyzing a model in which consumers vary only in terms of their costs of obtaining a reproduction our analysis provides partial support to the first claim of these previous authors while giving little or no support to the second claim

self employment the role of intellectual property right laws little is known about the impact of intellectual property rights iprs on typically imitative self employment ipr laws have contrasting dual innovation creation and access effects on self employment activity the first effect is positive where strong ipr laws promote innovation and so create new opportunities for self employment the second effect is negative where strong ipr laws restrict access to innovation and technology used as inputs to self employed businesses using a 33 country dataset over the period 1995 2000 we estimate the impact of ipr laws on self employment helping to fill the vacuum of empirical evidence that has plagued policy decision making in this area we find that patent activity has a negative effect on self employment however overall we find that more extensive and strong ipr laws have a net positive effect on self employment activity

intellectual property rights and the welfare effects of agricultural r d the profound changes that have affected agriculture in modern times are perhaps best illustrated by the evolution of production techniques due to mechanization new chemical inputs such as herbicides pesticides and fertilizers genetic selection of crops and animals new crop varieties and countless other technical and organizational improvements these innovations have allowed a generalized increase in physical output while at the same time agriculture has suffered a massive exodus of labor forces towards the non farm sectors indeed a stylized fact of developed countries post war growth is that productivity in agriculture has grown faster than in other sectors jorgenson and gollop 1992 this remarkable record naturally begs the question of what is at its root and a view that commands considerable consensus is that agricultural productivity growth is due to past investments in scientific research and development r d

fighting software piracy which governance tools matter in africa this article integrates previously missing components of government quality into the governance piracy nexus in exploring governance mechanisms by which global obligations for the treatment of iprs are effectively transmitted from international to the national level in the battle against piracy it assesses the best governance tools in the fight against piracy and upholding of intellectual property rights iprs the instrumentality of ipr laws treaties in tackling piracy through good governance mechanisms is also examined findings demonstrate that 1 while all governance tools under consideration significantly decrease the incidence of piracy corruption control is the most effective weapon 2 but for voice and accountability political stability and democracy ipr laws treaties are instrumental in tackling piracy through government quality dynamics of rule of law regulation quality government effectiveness corruption control and press freedom hence the need for a policy approach most conducive to expanding development is to implement an integrated system of both iprs and corollary good governance policies moreover our findings support the relevance of good governance measures in developing countries wishing to complement their emerging ipr regimes

r d and internal finance a panel study of small firms in high tech industries since joseph schumpeter economists have argued that internal finance should be an important determinant of r d expenditures yet almost without exception previous empirical studies have not found evidence of such a relation using newly available data the authors investigate this puzzle with a panel of 179 small firms in high tech industries under each estimation strategy they employ the authors find an economically large and statistically significant relationship between r d investment and internal finance their results are consistent with the view that because of capital market imperfections the flow of internal finance is the principal determinant of the rate at which small high tech firms acquire technology through r d copyright 1994 by mit press

anti foreign bias in the court welfare explanation and evidence from canadian intellectual property litigations abstract are judges concerned in the same way as policy makers with the effects of their decisions on national welfare in this paper we analyze this question by examining the outcomes of intellectual property rights ipr litigations between domestic and foreign firms we use a simple model of oligopoly in which ipr takes the form of a more efficient production technology to illustrate how antiforeign bias varies across cases when judges have welfare concerns the predictions of the model are tested using data on all canadian ipr cases over a four year period we find that foreign firms have about 25 percentage points lower probability of protecting their ipr in canadian courts relative to domestic firms we also find that courts decisions are aligned with national welfare maximization principles so that foreign firms are less likely to win in those cases when the implied welfare gains from not protecting foreign ipr are greater these findings are robust to controlling for endogenous selection of firms into litigation

global liquidity transmission to emerging market economies and their policy responses abstract this paper analyzes the transmission of global liquidity gl from advanced economies aes to emerging market economies emes we distill gl momenta from the macro financial data of aes through a factor model and identify them with sign restrictions as policy driven market driven and risk averseness factors using a panel factor augmented var analysis we then investigate eme responses to shocks to gl momenta a positive shock to policy driven liquidity boosts growth in emes elevating stock prices and currency values while a shock to risk averseness has a largely opposite effect a market driven gl expansion boosts stock markets and lowers funding costs increasing competitiveness and current account balance inflation targeting emes are found to fare better than emes under alternative regimes in terms of macro financial volatility

does remuneration affect the discipline and the selection of politicians evidence from pay harmonization in the european parliament we study the harmonization of the base pay for the members of the european parliament meps prior to this reform implemented in 2009 base pay was aligned with that of national parliamentarians causing large differences in pay between the meps representing 27 member states based on detailed information on individual meps between 2004 and 2011 we find that the reform which introduced an exceptional base pay increase of 200 per national delegation on average has a positive incentive effect on in office effort proxied by the number of speeches written declarations and reports drafted however more generous remuneration is associated with higher rates of absenteeism with respect to political selection we find that higher pay also raises reelection rates the composition of the pool of meps in terms of ex ante quality approximated by formal education previous political experience in elected office and occupational background is however unaffected if we restrict our attention to newly elected meps a salary increase is related to fewer meps with previous political experience at the highest national level

a survey of the economics of patent systems and procedures the last several decades have seen increases in patenting activity worldwide as well as growing issues related to patent quality in response to these quality issues a recent patent literature has emerged that investigates the behavior and incentives of patent examiners applicants and third parties in this paper we provide an overview of patent procedures patent systems and a survey of the new economic literature on patent systems both theoretical and empirical papers are considered policy implications coming from this literature are presented

the industrial organization of congress or why legislatures like firms are not organized as markets this paper provides a theory of legislative institutions that parallels the theory of the firm and the theory of contractual institutions like market institutions legislative institutions reflect two key components the goals or preferences of individuals here representatives seeking reelection and the relevant transactions costs we present three conclusions first we show how the legislative institutions enforce bargains among legislators second we explain why given the peculiar form of bargaining problems found in legislatures specific forms of nonmarket exchange prove superior to market exchange third our approach shows how the committee system limits the types of coalitions that may form on a particular issue

capitalists and workers knowledge and the strategic role of investment within the firm does the ownership of capital confer a strategic advantage within the firm the formation of a firm frequently represents an attempt by an individual to secure a return on knowledge and we demonstrate that in this context there can be an incentive to precommit capital before contracting with other members of the firm that is to be the capitalist results are also obtained on the investment level and wage rate the key ingredient of the model is emergence of a product market entry threat from within the firm this contrasts with the anonymous external potential entrant prevalent in the literature

patents and other intellectual property rights in this article the author reviews intellectual property rights iprs with some emphasis on the protection of agricultural and life sciences innovations the main institutional features of iprs are first discussed along with a brief historical background and an articulation of the main rationale for the existence of such rights this is followed by an overview of the principal economic issues related to iprs the author explains the main benefit cost trade offs of allowing patents and other iprs and then analyzes specific issues in some depth including the scope of patent protection the effects of patent races and the problems arising when iprs concern cumulative and or complementary innovations the author further illustrates the economics of iprs by considering instruments alternative to patents such as prizes and government procurement contracts finally the author briefly discusses some open policy issues in this area

job matching with finite horizon and risk aversion the consequences of introducing risk averse workers with a known finite retirement age into a simple job matching framework are explored the job matching model includes two jobs in the primary job workers and firms learn about the worker s productivity by observing his output over time in the secondary job productivity of any worker is known with certainty at the outset workers start off in the primary job but based on their observed performance may choose to switch to the secondary job the model is developed in two stages first the finite retirement age is introduced while the usual assumption of risk neutral workers is retained in this model it is shown that all workers who achieve at least a certain cumulative output record denoted r by a certain age denoted t will thereafter remain in the primary job until retirement those who do not achieve r by age t switch to the secondary job at or before age t and remain there second risk aversion is introduced along with finite retireme

determining global currency bloc equilibria an empirical strategy based on estimates of anchor currency choice the study presents an empirical strategy for determining global currency bloc equilibria the procedure includes first a nested logit estimation of the combined determinants of currency regime and anchor currency choice second a test for a welfare maximizing regime decision in which estimates of the relative welfare of alternative regimes are inferred from the results of the first step estimation and third taking the path dependency of regime choice into account a currency bloc equilibrium is derived in equilibrium the dollar bloc is somewhat smaller and the euro bloc larger than at present counterfactual exercises assess among others the potential for a renminbi bloc

the dynamics of pretrial negotiation it is shown that many cases proceed to court despite ample opportunity for interaction and much of the settlement takes place on the courthouse steps the deadline effect when fixed costs of bargaining are introduced a u shaped pattern of settlement appears with a greater chance of settlement at the beginning and at the end of negotiations than in the middle these characteristics persist even as the time between offers approaches zero the theoretical predictions are consistent with the stylized facts a large proportion of the lawsuits that are settled out of court are settled very close to the trial date or in the first several days of the trial 3 although the deadline effect appears in many other settings as well it has little theoretical support 4

reserve flows and monetary autonomy under a fixed exchange rate the british experience under bretton woods abstractthis paper uses a stochastic intertemporal model to analyse reserve flows and monetary autonomy under a fixed exchange rate and applies the model to a study of the british experience under

location taxation and governments an exchange theory of intellectual property abstract the standard economic model of intellectual property is an efficient property rights solution to a market failure problem of investment in a non rival and non excludable good we propose an exchange theory of intellectual property based on a contracting approach in the context of market making and enforcement of economic rights in exchange for monopoly taxation rights we use a hotelling 1929 type spatial model to show the relationship between location and pricing decisions of innovating firms under differing intellectual property institutional quality and taxation regimes

patents and cumulative innovation causal evidence from the courts cumulative innovation is central to economic growth do patent rights facilitate or impede such follow on innovation this paper studies the effect of removing patent protection through court invalidation on the subsequent research related to the focal patent as measured by later citations we exploit random allocation of judges at the u s court of appeal for the federal circuit to control for the endogeneity of patent invalidation we find that patent invalidation leads to a 50 percent increase in subsequent citations to the focal patent on average but the impact is highly heterogeneous patent rights appear to block follow on innovation only in the technology fields of computers electronics and medical instruments moreover the effect is entirely driven by invalidation of patents owned by large patentees that triggers entry of small innovators suggesting that patents may impede the democratization of innovation

the measurement of intellectual property rights protection this research improves upon empirical studies that examine the measurement of intellectual property rights ipr protection prior measures examine only one type of law or lack a component that addresses the actual enforcement of these laws the measure presented here uses three types of ipr laws and enforcement components for them

multimarket contact and collusive behavior traditional analyses of industrial behavior typically link the exercise of market power in an industry to internalfeatures such as demand conditions concentration and barriers to entry nevertheless some economists have remained concerned that external factors such as contact across markets may also play a significant role in determining the level of competitiveness in any particular industry in this article we examine the effect of multimarket contact on the degree of cooperation that firms can sustain in settings of repeated competition we isolate conditions under which multimarket contact facilitates collusion and show that these collusive gains are achieved through modes of behavior that have been identified in previous empirical studies of multimarketfirms

the influence of regulations on innovation a quantitative assessment for oecd countries abstract regulatory framework conditions have been identified as important factors influencing the innovation activities of companies industries and whole economies however in the empirical literature the impacts of regulation have been assessed as rather ambivalent for innovation different types of regulations generate various impacts and even a single type of regulation can influence innovation in various ways depending on how the regulation is implemented the endogenous growth approach developed by carlin and soskice 2006 and empirically applied by crafts 2006 which determines endogenously the rate of technological progress and therefore innovation allows a conceptual analysis of the influence of different types of regulation on innovation in general the negative effect of compliance costs should be compared with the more dynamic effect of regulations generating additional incentives for innovative activities based on this approach we derive hypotheses on the impact of different specific regulations on innovation we differentiate between economic social and institutional regulations following the oecd taxonomy on regulations existing economic analyses are surveyed which are characterised by rather heterogeneous approaches data bases and results the paper aims to apply a comprehensive and comparative approach to investigate quantitatively the innovation impacts in 21 oecd countries using panel data for the period between 1998 and 2004 in summary the empirical results confirm the hypotheses derived from the conceptual theoretical framework determining technical progress and innovation endogenously and allowing a distinction between short term and long term effects consequently the theoretical approach is an appropriate starting point for the empirical analysis of the influence of different regulations on innovation

technology adoption learning spillovers and the optimal duration of patent based monopolies abstract the paper analyses an often overlooked aspect of the patent system namely that a monopoly franchise for production of a new good could lead to a second best welfare optimum event when there was no future prospect of inventions being induced by the patent it is shown that a paten may improve economic welfare relative to a regime of competitive supply when there are learning externalities or spillovers from experience in the process of production comparative statics show that stronger learning effects at low levels of experience tend to strengthen the case for ex post grant of a monopoly franchise

software copyright infringement among college students in recent years the issue of infringement in the software industry has gained international attention as the demand for software continues to grow the growing presence of unauthorized reproduction of copyrighted products inhibits full potential growth and discourages creative activity this study analyses the extent of software copyright infringement among college students and attitudes of these students with regard to risk of apprehension and conviction this study finds a significantly higher likelihood of infringement for computer majors and male students and a decrease in the likelihood of infringement for older students this study also uncovers differences in attitudes toward risk of apprehension and conviction between majors in scientific fields and those in business and economics whereas the first group of majors appears to exhibit risky behaviour the latter tends to be more risk averse

the welfare implications of unauthorized reproduction of intellectual property in the presence of demand network externalities this paper finds that unauthorized reproduction of intellectual property in the presence of demand network externalities can not only induce greater firm profits relative to the case where there is no copying it can lead to a pareto improvement in social welfare ceteris paribus when network externalities are present firms have a greater incentive to expand output because marginal revenue is higher and or they may wish to create preemptive installed bases this paper suggests that unauthorized copying can be a relatively efficient means of achieving this by allowing the firm in effect to price discriminate among different classes of consumers copyright 1994 by blackwell publishing ltd

which countries protect intellectual property the case of software piracy david g steel using data on software piracy we examine how protection of intellectual property varies across countries consistent with other studies we find that intellectual property receives greater protection in developed economies high income countries have lower piracy rates we also find that protection depends on cultural factors countries with an individualist culture have lower piracy rates than do countries with a collectivist culture piracy rates are also lower in countries that have strong institutions that enforce contracts and protect property from expropriation these results suggest that national policies toward intellectual property reflect not only economic concerns but also national culture and institutions jel 034 l86 i introduction intellectual property rights are a recurring focus of international negotiation developed nations argue that such rights are essential for promoting innovation and economic growth many developing nations on the other hand argue that intellectual property rights inhibit economic development by restricting use of existing knowledge a generation of theoretical research has demonstrated that there is truth in both arguments depending on circumstances individual countries may reasonably favor different levels of protection for intellectual property 1 surprisingly little is known however about how such protection is actually determined only a handful of previous studies have analyzed cross national variation in intellectual property rights 2 these studies relate patent rights as formalized in the laws of individual countries to a range of social and economic variables the main empirical finding is that developed countries provide stronger patent protection in this article we extend this line of research by examining cross national variation in piracy of computer software the business software alliance and the software publishers association 1998 have estimated piracy rates the ratio of illegally copied units to total units for business software in more than 70 countries for 1994 97 these rates vary substantially in some countries essentially all new software was pirated in other countries less than 40 of software was pirated what explains these differences consistent with previous studies we find that developed countries provide greater protection for intellectual property than do developing countries high income countries tend to have lower piracy rates this is true both in a simple comparison of piracy rates with per capita income and to a lesser extent in regressions that control for other factors as we discuss below the causal interpretation of this correlation is not obvious the correlation is consistent with the hypothesis that intellectual property rights promote economic development however it may also reflect reverse causality e g if developing nations offer less protection so that they can use the intellectual property of developed nations or common causation by other factors many commentators have suggested that culture may also explain differences in piracy rates western countries they argue have individualist cultures that naturally embrace individual ownership of intellectual property whereas many non western countries have collective cultures that emphasize sharing over individual ownership as a result these societies have been reluctant to adopt western conceptions of intellectual property rights to test whether differences in culture lead to differences in intellectual property rights we relate piracy rates to an index of individualism and collectivism developed by hofstede 1980 1983 we find strong evidence that culture matters 3 countries with a tradition of individualism pirate much less than do countries with a tradition of collectivism this is true both in simple comparisons of piracy rates with individualism and in regressions that control for other factors

exchange rate regimes in the modern era fixed floating and flaky this paper provides a selective survey of the incidence causes and consequences of a country s choice of its exchange rate regime i begin with a critical review of michael klein and jay c shambaugh s 2010 book exchange rate regimes in the modern era and then proceed to provide an alternative overview of what the economics profession knows and needs to know about exchange rate regimes while a fixed exchange rate with capital mobility is a well defined monetary regime floating is not thus it is unclear whether it is theoretically sensible to compare countries across exchange rate regimes this comparison is quite difficult to make empirically it is often hard to figure out what the exchange rate regime of a country is in practice since there are multiple conflicting regime classifications more importantly similar countries choose radically different exchange rate regimes without substantive consequences for macroeconomic outcomes like output growth and inflation that is the profession knows surprisingly little about either the causes or consequences of national choices of exchange rate regimes but since the consequences of these choices are small understanding their causes is of only academic interest jel e52 f33

the patent paradox revisited an empirical study of patenting in the u s semiconductor industry 1979 1995 we examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to r d yet the propensity of semiconductor firms to patent has risen dramatically since the mid1980s we explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 u s semiconductor firms during 1979 1995 the results suggest that the 1980s strengthening of u s patent rights spawned patent portfolio races among capital intensive firms but it also facilitated entry by specialized design firms

copying and indirect appropriability photocopying of journals creators and owners of intellectual properties are alarmed by the growth of technologies that ease the tasks of copying these properties this paper however shows that the unauthorized copying of intellectual properties need not be harmful and actually may be beneficial the empirical impact of photocopying on publishers of journals is examined in an attempt to discover if publishers can indirectly appropriate revenues from users who are not original purchasers the evidence indicates that publishers can indirectly appropriate revenues from users who do not directly purchase journals and that photocopying has not harmed journal publishers 18 references 1 table

a stable international monetary system emerges inflation targeting is bretton woods reversed a stable international monetary system has emerged since the early 1990s a large number of industrial and a growing number of developing countries now have domestic inflation targets administered by independent and transparent central banks these countries place few restrictions on capital mobility and allow their exchange rates to float the domestic focus of monetary policy in these countries does not have any obvious international cost inflation targeters have lower exchange rate volatility and less frequent sudden stops of capital flows than similar countries that do not target inflation inflation targeting countries also do not have current accounts or international reserves that look different from other countries this system was not planned and does not rely on international coordination there is no role for a center country the imf or gold it is durable in contrast to other monetary regimes no country has been forced to abandon an inflation targeting regime succinctly it is the diametric opposite of the post war system bretton woods reversed

court decisions and equity markets estimating the value of copyright protection abstract we construct a database of u s federal court decisions pertaining to copyright and changes in federal statutory copyright law and use this database to assemble indices measuring changes in the breadth of copyright protection we combine our indices with information on excess returns to equity from a quarterly panel of firms and estimate how the breadth of copyright affects the market valuation of firm equity a typical statute that increases copyright breadth generates an increase in a firm s excess return to equity of 40 209 basis points depending on the exact time frame the size of the firm and the importance of the change in statutory law a typical high court decision expanding copyright generates a 13 105 basis point increase in excess returns our results are robust across 4 5 year subsamples and the size distribution of firms our statutory findings are strongest in the most recent portion of the sample

the real exchange rate and economic growth revisiting the case using external instruments abstract we investigate the impact of movements in the real exchange rate on economic growth based on five year average data for a panel of over 150 countries in the post bretton woods period unlike previous literature we use external instruments to deal with possible reverse causality from growth to the real exchange rate our country specific instruments are i global capital flows interacted with individual countries financial openness and ii the growth rate of official reserves we find that a real appreciation depreciation reduces raises significantly annual real gdp growth more than in previous estimates in the literature however our results confirm this effect only for developing countries and for pegs

surprising similarities recent monetary regimes of small economies in contrast to earlier recessions the monetary regimes of many small economies have not changed in the aftermath of the global financial crisis this is due in part to the fact that many small economies continue to use hard exchange rate fixes a reasonably durable regime however most of the new stability is due to countries that float with an inflation target though a few have left to join the eurozone no country has yet abandoned an inflation targeting regime under duress inflation targeting now represents a serious alternative to a hard exchange rate fix for small economies seeking monetary stability are there important differences between the economic outcomes of the two stable regimes i examine a panel of annual data from more than 170 countries from 2007 through 2012 and find that the macroeconomic and financial consequences of regime choice are surprisingly small consistent with the literature business cycles capital flows and other phenomena for hard fixers have been similar to those for inflation targeters during the global financial crisis and its aftermath

social norms and emission tax multiple equilibria in adopting pollution abatement device the effect of social norm is addressed in an adoption game where an emission tax is used to motivate oligopolistic firms to adopt a pollution abatement device we ask if the intrinsic motivation from social norm alone can motivate firms to participate in adoption the multiple equilibria in the adoption game indicates two possibilities this intrinsic motivation may or may not enhance adoption the existing literature on equilibrium selection further suggests that the most likely outcome is that it cannot enhance adoption next by keeping the assumption of symmetry we show that if cooperation is an option for firms then the presence of two coordination effects social norm on adoption and cooperation benefits on output will result in the existence of asymmetric adoptions

economic benefits and costs of biotechnology innovations in agriculture the conceptual model necessary for an assessment of biotechnology s economic benefits and costs is outlined emphasizing the need to account for the proprietary nature of biotechnology innovations the model is illustrated with an application to roundup ready soybeans the estimated value of this innovation is sizeable with consumers and innovators claiming the larger share of net benefits also disparities in intellectual property rights protection across countries affect the distribution of benefits consumer resistance toward genetically modified organisms gmos and the issues of labeling and market segregation complicate the economic evaluation of biotechnology innovations and a number of related regulation and public policy issues are discussed emerging output trait gmos are potentially less controversial and ma y bring more benefits to all participants in the agri food sector but this outcome depends crucially on the development of an effective credible and internationally harmonized regulatory system

the economics of product patents this paper develops a model of product patents in which the patent changes the nature of market entry behavior rather than preventing entry entirely the model incorporates three levels of action namely the innovator s patenting decision the potential entrant s location decision and possible court action the analysis demonstrates how the characteristics of the patents system and the enforcement framework can influence rivals variety choices and thus the market equilibrium it also considers how the system can in principle be adjusted to improve social welfare copyright 1990 by american economic association

how broad should the scope of patent protection be i explore the trade off between a patent s length that is its lifetime and its width that is its scope of coverage a wider patent generally reduces the distortion of consumers choices between the patented brand of the product and unpatented lower priced varieties sold by competitors but also permits higher prices which increase relative to profits the deadweight losses from consumers switching consumption out of the product class i show under what conditions infinitely lived but very narrowly focused patents are the socially efficient way to reward innovation and under what conditions very short lived but very broad patents are optimal

patent enforcement a review of the literature without the confidence that patent rights can be enforced quickly and efficiently when needed the patent system will not stimulate innovation for this reason governments academics international institutions and the private sector have poured significant resources into gathering and analysing statistics on patent enforcement over the last two decades this paper reviews these studies and finds that while infringement is relatively common much enforcement occurs informally and less than 1 2 of patents incur litigation new strategic uses of the enforcement system especially by nonpracticing entities are the major emerging enforcement issue especially in the united states while the old problem of litigation costs attracts the lion s share of empirical attention it has produced remarkably few solutions to date

reexamining the wage tenure and experience relationship despite considerable empirical research a debate still rages about the relative importance of tenure and experience in determining wages given the existence of unobserved heterogeneity using a data set well suited to this problem the author finds after correcting for unobserved heterogeneity that tenure increases wages only in the first several years of employment the accumulated effect of general labor market experience increases wages substantially over the career this evidence suggests that specific human capital accumulation is relatively less important than some might believe this result is robust to different estimation techniques that have been suggested in the literature copyright 1991 by mit press

the international monetary system in the last and next 20 years the last two decades have seen far reaching changes in the structure of the international monetary system europe moved from the european monetary system to the euro china adopted a dollar peg and then moved to a basket band and crawl in 2005 emerging markets passed through a series of crises leading some to adopt regimes of greater exchange rate flexibility and others to rethink the pace of capital account liberalization interpreting these developments is no easy task some observers conclude that recent trends are confirmation of the bipolar view that intermediate exchange rate arrangements are disappearing while members of the fear of floating school conclude precisely the opposite we show that the two views can be reconciled if one distinguishes countries by their stage of economic and financial development among the advanced countries intermediate regimes have essentially disappeared this supports the bipolar view for the group of countries for which it was first developed within this subgroup the dominant movement has been toward hard pegs reflecting monetary unification in europe while emerging markets have also seen a decline in the prevalence of intermediate arrangements these regimes still account for more than a third of the relevant subsample here the majority of the evacuees have moved to floats rather than fixes reflecting the absence of emu like arrangements in other parts of the world among developing countries the prevalence of intermediate regimes has again declined but less dramatically where these regimes accounted for two thirds of the developing country subsample in 1990 they account for a bit more than half of that subsample today as with emerging markets the majority of those abandoning the middle have moved to floats rather than hard pegs the gradual nature of these trends does not suggest that intermediate regimes will disappear outside the advanced countries anytime soon barry eichengreen and raul razo garcia

the value of u s patents by owner and patent characteristics abstract this paper uses renewal data to estimate the value of u s patents controlling for patent and owner characteristics estimates of u s patent value are substantially larger than estimates for european patents however the ratio of u s patent value to r d for firms is only about 3 contrary to a common assertion patents issued to small patentees are much less valuable than those issued to large corporations litigated patents are more valuable as are highly cited patents however patent citations explain little variance in value suggesting limits to their use as a measure of patent quality

legislators and interest groups how unorganized interests get represented this paper derives a supply price for public policy using a constrained maximization model in the model three sets of agents each have preferences over outcomes organized interest groups offer campaign contributions to improve their own wealth voters offer votes to obtain outcomes closer to their most preferred outcomes and legislators seek both campaign contributions and votes to obtain reelection a given legislator s supply price for policy is shown to depend on the productivity of his effort as determined by committee assignments priority and ability and by the preferences of his unorganized constituency in the home district two extreme assumptions about the effectiveness of campaign spending in eliciting votes are used to illustrate the comparative statics properties of the model the prediction of the model is that interest groups will in general seek out legislators whose voters are indifferent to the policy the interest group seeks thus voters who do have preferences over policy are in effect represented even though they are not organized

entrepreneurs and new ideas we study how early stage new ideas are turned into successful businesses even promising ideas can be unprofitable if they fail on one dimension such as technical feasibility correspondence to market demand legality or patentability to screen good ideas the entrepreneur needs to hire experts who evaluate the idea along their dimensions of expertise sharing the idea however creates the risk that the expert would steal it yet the idea thief cannot contact any other expert lest he should in turn steal the idea thus stealing leads to incomplete screening and is unattractive if the information of the other expert is critical and highly complementary in such cases the entrepreneur can form a partnership with the experts thus granting them the advantage of accessing each other s information yet very valuable ideas cannot be shared because it is too tempting to steal them

the moral legitimacy of intellectual property claims american business and developing country perspectives private property forms the bedrock of the business society relationship in a market economy in one way or another most societies limitwhat people can claim as property as well as theextent of claims they can make regarding it in the international arena today intellectual property rights are a focal point of debate many developing countries do not recognize the monopoly claims of patents and copyrights asserted by business as legitimate this paper reviews contemporary areas of dispute and then presents the tasks facing the construction of a fair intellectual property rights regime

intellectual property rights in china the changing political economy of chinese american interests we review the evolution of modern chinese intellectual property right ipr laws and enforcement and explore economic and political forces involved in international conflicts over chinese ipr protection our analysis considers why the us and china moved from conflict to cooperation over intellectual property rights structural and institutional aspects of the political economy of iprs within each country are considered and data on chinese us trade in intellectual property intensive goods are examined we conclude that although enforcement of iprs within china continues to be relatively weak chinese ipr institutions are converging on those in the oecd nations

south north trade intellectual property jurisdictions and freedom to operate in agricultural research on staple crops international food policy research institute washington d c center for the application of molecular biology to international agriculture canberra university of california berkeley the authors are listed alphabetically philip pardey is a senior research fellow and patricia zambrano a senior research assistant at the international food policy research institute carol nottenburg is director of intellectual property at the center for the application of molecular biology to international agriculture and brian wright is a professor and eran binenbaum a ph d student in the department of agricultural and resource economics university of california berkeley stephen stohs bonwoo koo and yuan liang provided excellent research assistance and agapi somwaru usda ers collaborated with us in compiling the trade data richard jefferson provided invaluable comments on earlier drafts research for this paper was made possible in part by a grant from the swedish international development agency sida

do fixers perform worse than non fixers during global recessions and recoveries there is an important debate about how economies with different exchange rate regimes performed during the great recession and its ensuing recovery while economic theory suggests that economies with fixed exchange rates are more affected and recover more slowly from global shocks than economies with non fixed exchange rates the empirical evidence on the most recent global recession has been mixed this paper examines the exchange rate and economic growth nexus and assesses how this relationship is affected by the four global recessions and recoveries the world economy has experienced post bretton woods while there is no robust long term relationship between exchange rate regimes and growth there is evidence that fixers recover from global recessions at a weaker pace than non fixers

the modern history of exchange rate arrangements a reinterpretation we develop a novel system of reclassifying historical exchange rate regimes one key difference between our study and previous classifications is that we employ monthly data on market determined parallel exchange rates going back to 1946 for 153 countries our approach differs from the imf official classification which we show to be only a little better than random it also differs radically from all previous attempts at historical reclassification our classification points to a rethinking of economic performance under alternative exchange rate regimes indeed the breakup of bretton woods had less impact on exchange rate regimes than is popularly believed

how valuable are the patents behind section 337 cases a us patent protects the owner of the intellectual property from imitators producing in the us and foreign imitators selling in the us market there are two venues for filing infringement cases against international infringement of us patents with the international trade commission itc using section 337 of the tariff act of 1930 or with federal district courts three indicators of patent value suggest that patents litigated under section 337 are on average more valuable however their values tend to be more variable the latter suggests that some firms may be using section 337 not for protection against international infringement of us patents but for protection against imports

earning through learning in legislatures this inquiry applies gary becker s theoretical notions of general and specific training to the experiential learning that occurs within political institutions in particular the u s congress in the process we isolate economic facets of these legislative experiences that influence the rental value of human capital derived from congressional training we identify four factors that structure legislators post elective wages pre congressional salary year of entry tenure and variables closely related to general training in congress specifically assignment to powerful legislative committees acquisition of broad skill packages investment in expanding skill set proficiencies and to a lesser extent life cycle driven declines in such investments

international currency exposures valuation effects and the global financial crisis abstract we examine the evolution of international currency exposures with a particular focus on the 2002 12 period during the run up to the global financial crisis there was a widespread shift towards positive net foreign currency positions such that relatively few countries exhibited the archetypal emerging market short foreign currency position on the eve of the global financial crisis during the crisis the upheaval in currency markets generated substantial currency generated valuation effects much of which were not reversed there is some evidence that the distribution of valuation effects was stabilizing in the sense of showing a negative covariation pattern with pre crisis net foreign asset positions