Papers by Mark Schankerman
LSE Research Online Documents on Economics, 2001
We study the determinants of patent suits and their outcomes over the period 1978-1999 by linking... more We study the determinants of patent suits and their outcomes over the period 1978-1999 by linking detailed information from the U.S. patent office, the federal court system, and industry sources. The probability of being involved in a suit is heterogeneous, being much higher for valuable patents and for patents owned by individuals and smaller firms. Thus the patent system generates incentives, net of expected enforcement costs, that differ across inventors. Patentees with a large portfolio of patents to trade, or having other characteristics that encourage "cooperative" interaction with disputants, more successfully avoid court actions. At the same time, key post-suit outcomes do not depend on observed characteristics. This is good news: advantages in settlement are exercised quickly, before extensive legal proceedings consume both court and firm resources. But it is bad news in that the more frequent involvement of smaller patentees in court actions is not offset by a more rapid resolution of their suits. However, our estimates of the heterogeneity in litigation risk can facilitate development of private patent litigation to mitigate this adverse effect of high enforcement costs.
RePEc: Research Papers in Economics, Aug 1, 2006
Strategic patenting is widely believed to raise the costs of innovating, especially in industries... more Strategic patenting is widely believed to raise the costs of innovating, especially in industries characterised by cumulative innovation. This paper studies the effects of strategic patenting on R&D, patenting and market value in the computer software industry. We focus on two key aspects: patent portfolio size which affects bargaining power in patent disputes, and the fragmentation of patent rights (.patent thickets.) which increases the transaction costs of enforcement. We develop a model that incorporates both effects, together with R&D spillovers. Using panel data for the period 1980-99, we find evidence that both strategic patenting and R&D spillovers strongly affect innovation and market value of software firms.
RePEc: Research Papers in Economics, Feb 1, 2005
The impact of R&D on growth through spillovers has been a major topic of economic research over t... more The impact of R&D on growth through spillovers has been a major topic of economic research over the last thirty years. A central problem in the literature is that firm performance is affected by two countervailing "spillovers": a positive effect from technological knowledge spillovers and negative business stealing effects from product market rivals. We develop a general framework incorporating these two types of spillovers and implement this model using measures of a firm's position in technology space and product market space. Using panel data on U.S. firms we show that technology spillovers quantitatively dominate, so that the gross social returns to R&D are nearly twice as high as the private returns. This result is robust to using tax incentives as instrumental variables for R&D. We also find that smaller firms generate lower social returns to R&D because they operate more in technological niches. Finally, we analyze three high-tech sectors in detail, and find that in one of them-pharmaceuticals-business stealing effects are sufficiently strong to make the private and social returns to R&D roughly equal.
National Bureau of Economic Research, 1991
RePEc: Research Papers in Economics, May 1, 2003
for constructive comments on an earlier draft of this paper, and to Don Siegal for generous help ... more for constructive comments on an earlier draft of this paper, and to Don Siegal for generous help with the AUTM data and other issues throughout the project. We also thank Alan Paau for very helpful suggestions on the design of the TLO survey. Alejandro Goren, Haim Mizrahi, and Anna Yosifun provided excellent research assistance. We thank the Samuel Neaman Institute for Advanced Studies in Science and Technology Policy at the Technion (Israel) for encouragement and financial support in this research project.
Support for R&D subsidies relies on empirical evidence that R&D "spills over" between firms. But ... more Support for R&D subsidies relies on empirical evidence that R&D "spills over" between firms. But firm performance is affected by two countervailing R&D spillovers: positive effects from technology spillovers and negative business stealing effects from R&D by product market rivals. We develop a general framework showing that technology and product market spillovers have testable implications for a range of performance indicators, and then exploit these using distinct measures of a firm's position in technology space and product market space. Using panel data on U.S. firms between 1980 and 2001 we show that both technology and product market spillovers operate, but technology spillovers quantitatively dominate. The spillover effects are also present when we analyze three high tech sectors in finer detail. Using the model we evaluate the net spillovers from three alternative R&D subsidy policies.
Social Science Research Network, 2015
for helpful comments. We thank John Golden and David Schwartz for their help in clarifying points... more for helpful comments. We thank John Golden and David Schwartz for their help in clarifying points regarding the legal doctrine and procedure governing patent invalidation suits. Joanne Evangelista provided excellent research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
Social Science Research Network, Feb 8, 1998
How valuable is patent protection? Estimates by technology field Mark Schankerman* I present evid... more How valuable is patent protection? Estimates by technology field Mark Schankerman* I present evidence on the private value of patent rights in France for different technology fields and nationalities of ownership, using nonparametric techniques and a parametric model of patent renewal. The distribution of the value of patent rights is highly skewed, patent protection is a significant but not the major source of private returns to R&D, and these characteristics vary across technology fields. I compute the R&D cash subsidy that is equivalent to the value of patent rights, measure the variations in value over time, technology fields, and nationalities, and show that these differences are correlated with patent grant rates.
World Bank eBooks, Feb 1, 1996
Social Science Research Network, 2023
The MIT Press eBooks, Sep 24, 2010
This chapter contains sections titled: The User Survey Methodology, Investing in Cost Assessment ... more This chapter contains sections titled: The User Survey Methodology, Investing in Cost Assessment for Open Source and Proprietary Software, Identifying the Cost Trade-offs for Open Source and Proprietary Software, Quality, Mixing by Consumers: The Cohabitation of Open Source and Proprietary Software, Appendix 5.1: An Economic Model of the Decision to Invest in TCO Analysis, Appendix 5.2: Who Does TCO Analysis: Econometric Estimates, Appendix 5.3: Cost Structure of Open Source and Proprietary Software: Econometric Estimates
Journal of Industrial Economics, Sep 1, 2013
Strategic patenting is widely believed to raise the costs of innovating, especially in industries... more Strategic patenting is widely believed to raise the costs of innovating, especially in industries characterised by cumulative innovation. This paper studies the effects of strategic patenting on R&D, patenting and market value in the computer software industry. We focus on two key aspects: patent portfolio size which affects bargaining power in patent disputes, and the fragmentation of patent rights (.patent thickets.) which increases the transaction costs of enforcement. We develop a model that incorporates both effects, together with R&D spillovers. Using panel data for the period 1980-99, we find evidence that both strategic patenting and R&D spillovers strongly affect innovation and market value of software firms.
The MIT Press eBooks, Sep 24, 2010
RePEc: Research Papers in Economics, Dec 1, 2001
We study the determinants of patent suits and their outcomes over the period 1978-1999 by linking... more We study the determinants of patent suits and their outcomes over the period 1978-1999 by linking detailed information from the U.S. patent office, the federal court system, and industry sources. The probability of being involved in a suit is heterogeneous, being much higher for valuable patents and for patents owned by individuals and smaller firms. Thus the patent system generates incentives, net of expected enforcement costs, that differ across inventors. Patentees with a large portfolio of patents to trade, or having other characteristics that encourage "cooperative" interaction with disputants, more successfully avoid court actions. At the same time, key post-suit outcomes do not depend on observed characteristics. This is good news: advantages in settlement are exercised quickly, before extensive legal proceedings consume both court and firm resources. But it is bad news in that the more frequent involvement of smaller patentees in court actions is not offset by a more rapid resolution of their suits. However, our estimates of the heterogeneity in litigation risk can facilitate development of private patent litigation to mitigate this adverse effect of high enforcement costs.
RePEc: Research Papers in Economics, Jul 1, 1991
RePEc: Research Papers in Economics, Apr 30, 2000
As a symptom of fundamental institutional weaknesses, corruption needs to be viewed within a broa... more As a symptom of fundamental institutional weaknesses, corruption needs to be viewed within a broader governance framework. It thrives where the state is unable to reign over its bureaucracy, to protect property and contractual rights, or to provide institutions that support the rule of law. Furthermore, governance failures at the national level cannot be isolated from the interface between the corporate and state sectors, in particular from the heretofore underemphasized influence that firms may exert on the state. Under certain conditions, corporate strategies may exacerbate misgovernance at the national level. An in-depth empirical assessment of the links between corporate behavior and national governance can thus provide particular insights. The 1999 Business Environment and Enterprise Performance Survey (BEEPS)-the transition economies component of the ongoing World Business Environment Survey-assesses in detail the various dimensions of governance from the perspective of about 3,000 firms in 20 countries. After introducing the survey framework and measurement approach, Hellman, Jones, Kaufmann, and Schankerman present the survey results, focusing on governance, corruption, and state capture. By unbundling governance into its many dimensions, BEEPS permits an in-depth empirical assessment. The authors pay special attention to certain forms of grand corruption, notably state capture by parts of the corporate sector-that is, the propensity of firms to shape the underlying rules of the game by "purchasing" decrees, legislation, and influence at the central bank, which is found to be prevalent in a number of transition economies. The survey also measures other dimensions of grand corruption, including those associated with public procurement, and quantifies the more traditional ("pettier") forms of corruption. Crosscountry surveys may suffer from bias if firms tend to systematically over-or underestimate the extent of problems within their country. The authors provide a new test for this potential bias, finding little evidence of country perception bias in BEEPS. This paper-a joint product of Governance, Regulation, and Finance, World Bank Institute, and the Chief Economist's Office, European Bank for Reconstruction and Development-is part of a larger program to measure governance and corruption worldwide. A companion paper that econometrically analyzes the effects of state capture is forthcoming. For further details, please visit
Social Science Research Network, May 1, 2003
for constructive comments on an earlier draft of this paper, and to Don Siegal for generous help ... more for constructive comments on an earlier draft of this paper, and to Don Siegal for generous help with the AUTM data and other issues throughout the project. We also thank Alan Paau for very helpful suggestions on the design of the TLO survey. Alejandro Goren, Haim Mizrahi, and Anna Yosifun provided excellent research assistance. We thank the Samuel Neaman Institute for Advanced Studies in Science and Technology Policy at the Technion (Israel) for encouragement and financial support in this research project.
The Review of Economics and Statistics, Sep 27, 2022
We study the effects of an institution that pools patents across geographical markets on the lice... more We study the effects of an institution that pools patents across geographical markets on the licensing and adoption of life-saving drugs in low-and middle-income countries. Using data on licensing and sales for HIV, hepatitis C and tuberculosis drugs, we show that there is an immediate and large increase in licensing by generic firms when a patent is included in the Medicines Patent Pool (MPP). The effect is heterogeneous across countries. The findings are robust to identification strategies to deal with endogeneity of MPP patents and countries. The impact on actual entry and sales, however, is much smaller than on licensing, which is due to geographic bundling of licenses by the MPP. More broadly, the paper highlights the potential of pools in promoting technology diffusion in developing countries.
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Papers by Mark Schankerman