Another brick in the wall? Technology leaders, patents, and the threat of market entry

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Dokumentart: Article
Date: 2014-12-02
Source: University of Tübingen Working Papers in Economics and Finance ; 77
Language: English
Faculty: 6 Wirtschafts- und Sozialwissenschaftliche Fakultät
Department: Wirtschaftswissenschaften
DDC Classifikation: 330 - Economics
Keywords: Patent
Other Keywords: Markteintritt
patenting decision
disclosure requirement
patent breadth
market entry threat
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Technology leaders protecting a technological headstart with a patent are provided with a powerful legal measure to restrict market entry. We analyze the impact of knowledge spillover on the decision to patent and the effect of varying patent breadth on the threat of market entry. An empirical test of our theoretical results suggests that (i) a large technological lead is protected by a patent only in industries with high knowledge spillover, and that (ii) patent breadth can mitigate the market entry threat.

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