Compulsory Licensing: Evidence from the Trading with the Enemy Act
American Economic Review · 2012 · Volume 102 · Issue 1
Abstract
Compulsory licensing allows firms in developing countries to produce foreign-owned inventions without the consent of foreign patent owners. This paper uses an exogenous event of compulsory licensing after World War I under the Trading with the Enemy Act to examine the effects of compulsory licensing on domestic invention. Difference-in-differences analyses of nearly 130,000 chemical inventions suggest that compulsory licensing increased domestic invention by 20 percent. (JEL D45, L24, N42, O31, O34)
Keywords
Rationing, Licensing, Contracting Out, Joint Ventures, Technology Licensing, Economic History: Government, War, Law, International Relations, and Regulation: U.S., Canada: 1913-, Innovation and Invention: Processes and Incentives, Intellectual Property Rights
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