Kellogg School of Management
2211 Campus Drive
Evanston, IL 60208
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: Northwestern University
NBER Working Papers and Publications
|July 2015||Does Compulsory Licensing Discourage Invention? Evidence From German Patents After WWI|
with Joerg Baten, Petra Moser: w21442
This paper investigates whether compulsory licensing – which allows governments to license patents without the consent of patent-owners – discourages invention. Our analysis exploits new historical data on German patents to examine the effects of compulsory licensing under the US Trading-with-the-Enemy Act on invention in Germany. We find that compulsory licensing was associated with a 28 percent increase in invention. Historical evidence indicates that, as a result of war-related demands, fields with licensing were negatively selected, so OLS estimates may underestimate the positive effects of compulsory licensing on future inventions.
Published: Joerg Baten, Nicola Bianchi, Petra Moser, Compulsory licensing and innovation – Historical evidence from German patents after WWI, Journal of Development Economics, Volume 126, 2017, Pages 231-242, ISSN 0304-3878, https://doi.org/10.1016/j.jdeveco.2017.01.002.