سرریزهای دانش و حقوق مالکیت معنوی

Knowledge spillovers are widely thought to be important for innovative activity, yet theory is ambiguous about the sign of the relationship. Assuming that knowledge spillovers are more easily exploited where intellectual property rights are weakly enforced, this paper uses country–industry data to uncover the link between knowledge spillovers and innovative activity, as well as the birth and death of enterprises. IPR enforcement disproportionately increases innovation spending in R&D intensive industries, as well as both rates of entry and exit. The results are robust to accounting for financial development, labor market ridigities and a number of other institutional factors.

An intrinsic feature of knowledge is that it is non-rival and imperfectly excludable — see Romer (1990). Imperfect excludability is typically interpreted as a technological feature of knowledge that implies that new knowledge, once generated, may be used by agents other than the innovator — a feature commonly known as “knowledge spillovers”. The term “knowledge spillovers” may also refer to the ability of an agent to produce new knowledge by building on prior knowledge, possibly including the agent's own stock of knowledge. Thus, knowledge spillovers constitute a factor of technological opportunity — affecting the yield of innovative effort — and also of appropriability — affecting the ability of agents to capture the returns of their innovative effort. 1 Although theory suggests that knowledge spillovers across agents should be related to the quantity of innovative activity, the sign of the link between spillovers and innovation is ambiguous. On one hand, large spillovers might encourage innovation by providing would-be innovators with something to build upon or by allowing the rapid diffusion of new knowledge. On the other hand, large spillovers might discourage innovation because an innovator's competitors also benefit from the generation of new knowledge (be it through imitation or inspiration). In addition, whether new knowledge is primarily a substitute or a complement to existing knowledge is ambiguous too. Since incumbents are better positioned to have accumulated past knowledge, the impact of spillovers on entry and exit may also help refine the empirically relevant set of theoretical models for understanding the process of innovation. 2 A key observation made in Romer (1990) is that the impact of spillovers on innovative behavior depends not only on the technology of knowledge generation but also on institutions. For example, if intellectual property rights (IPRs) are not well-enforced, or if IPR disputes are costly and unpredictable, then appropriability is weaker than otherwise. Moreover, this should be particularly noticeable in industries in which the technologically determined extent of knowledge spillovers across agents is large — i.e. where opportunity is also high. 3 This suggests that exploiting variation across countries in IPR enforcement, together with variation across industries in innovation activity, may be useful for uncovering the impact of knowledge spillovers on innovation. Consider measuring research intensity in a country where IPRs are strong, and where financial, labor and product markets are relatively frictionless. This provides a benchmark for innovative behavior when the impact of knowledge spillovers on appropriability is limited. Then, assuming appropriability encourages innovation primarily in industries with large knowledge spillovers, whether innovative activity in industries that are R&D intensive in the benchmark environment decreases disproportionately with a weakening of IPRs should indicate whether these are industries where potential spillovers are very large.4 Furthermore, whether rates of entry are also disproportionately affected in R&D-intensive industries, and whether the disproportionate impact is positive or negative, should indicate the relative importance of entrants and incumbents in taking advantage of these spillovers. Finally, whether the behavior of entry and exit is disjoint indicates whether the spillover-induced replacement of incumbents by innovating entrepreneurs is an important feature of the process of innovation. This paper implements the empirical strategy outlined above, to identify the link between institutions that limit costly IPR disputes and research intensity, as well as entry and exit. The paper exploits country–industry variation in rates of entry, exit and innovation indicators to understand whether knowledge spillovers discourage innovation, and whether entry or exit play an important role in this process. The paper focuses largely on innovation spending – a measure of the inputs towards innovation – following the “absorptive capacity” hypothesis in Cohen and Levinthal (1990) and Griffith et al. (2004) that spending is necessary to adopt external knowledge, so that innovative inputs and outputs are positively linked. This contrasts with the view in Spence (1984) that spillovers are costless, so that greater spillovers may encourage R&D spending yet lower innovative output. However, we also ask whether there is a disproportionate sensitivity of industry growth to IPRs in R&D intensive industries, underlining the validity of the absorptive capacity hypothesis. This paper uses data from Eurostat, which provides internationally comparable industry data covering the universe of legal firms in 28 European countries, including both manufacturing and non-manufacturing industries.5 Country–industry data provide a natural environment in which to search for evidence of a link between IPRs and innovative entry. Samaniego (2010) finds that country and industry dummies account for almost half the variation in European rates of entry and exit — whereas time dummies account for about 1%. The use of European data implies that the countries considered do not significantly differ in their access to natural or human resources, given low barriers to trade and immigration. The main results are as follows. First, comparing across countries, enterprises in weak-IPR countries tend to disproportionately report difficulty raising funds, difficulty finding partners for innovation or the dominance of an established incumbent as obstacles to innovation. This suggests that IPR enforcement not only encourages innovation, but that it shifts the balance towards entrepreneurs and away from incumbents. Then, we find that effective IPR enforcement indeed tends to encourage innovation spending in R&D intensive industries. In addition, the same is true of both rates of entry and exit. The results are robust to conditioning on a variety of institutional factors, including other forms of property rights or contract enforcement, entry costs and financial development. As discussed below, IPR enforcement tends to be measured using patent protection measures, and contribution of the paper is to use several institutional indicators, including several different indicators of IPRs. The results speak in favor of models of economic growth where knowledge spillovers across firms encourage innovation, and where entry and exit are important for innovation. For example, in R&D-based models of growth that are close to growth accounting frameworks such as Romer, 1990 and Jones, 1995 and Krusell (1998), growth is driven by knowledge spillovers across firms, but there are no industry dynamics to delimit the scope of spillovers. Our results suggest it is important to distinguish between the impact of spillovers on entrants and incumbents. In the basic creative destruction model of Aghion and Howitt (1992), as well as more recent versions such as Howitt (1999), knowledge spillovers increase the rate of innovation, and this favors entry (and leads to exit) because incumbents face the obsolescence of their current IP. The key is that, in these models, innovation is a substitute for prior expertise, so that “business stealing” is an important incentive for innovating that favors entrants. Several more recent papers extended such models to allow for incumbent innovation, as well as entry and exit.6 In the quality ladder model of Klette and Kortum (2004) knowledge spillovers occur because a successful innovator raises permanently the productivity of the next innovator, whoever it is, and as such spillovers affect entrants and incumbents similarly. Peretto (1998) argues that the tendency should be towards incumbent-dominated R&D and, while our findings appear to contradict this conclusion, the model is useful for interpreting those findings. Peretto (1998) assumes a weak-IPR environment where there is a tendency to develop large innovative incumbents because size is a way to internalize knowledge spillovers when appropriability is weak, and this is consistent with the finding that in countries with weak IPRs innovative entry appears suppressed, as well as the surveys that report the presence of a dominant incumbent as an obstacle to innovation in such countries. The implication is that in an environment with strong IPRs innovative entrepreneurship should be boosted, as found in this paper. Acemoglu and Cao (2010) and Akcigit and Kerr (2010) also develop models in which both entrants and incumbents may innovate and, while they do not study the impact of IPRs in their models, the models suggest reasons why the entrant-bias of IPR-protected innovation carries over into an environment with incumbent innovators. In both models, entrants are more likely to introduce innovations that are fundamentally different from what is on the market, whereas incumbents are more likely to improve existing product lines — an activity that would depend more on in-house knowledge and (hence) less on the IPR regime. The results stand in contrast to the view of Teece (1986) and Gans et al. (2002), whereby a strong IPR regime may discourage entry in innovative sectors because it allows innovators to profit by selling their idea to an incumbent who may have developed complementary assets (e.g. distribution networks) rather than having to enter to benefit from the idea via entry and production.7 This could be because complementary assets may not be critical in most industries, or are not difficult for innovators to acquire themselves, but more likely it is simply because weak IPRs discourage innovation – via entry and via the market for ideas – rather than shifting it between non-market innovators and market incumbents. The identification of knowledge spillovers at the industry level has typically involved employing a measure of knowledge flows, such as patent citations (e.g. see Jaffe et al., 2000) or survey responses (Cohen et al., 1987 and Klevorick et al., 1995), while Bernstein and Nadiri (1988) estimate joint production functions for a small set of hi-tech industries, measuring knowledge using the depreciated stock of R&D spending. The strategy here is complementary and relies instead on the identification of knowledge spillovers through their interaction with intellectual property rights enforcement. The idea that IPRs are of different value to different industries was explored by Mansfield (1986), again using survey data, and the survey of Rockett (2011) finds mixed evidence that IPRs affect R&D investments (for example, while Arora et al. (2003) find a positive relationship in certain industries, Qian (2007) finds only a weak relationship in one of those industries, pharmaceuticals). However, IPRs tend to be measured using patent protection measures, and Levin et al. (1985) find that most firms do not view the patent system as an important way of protecting intellectual property. This paper finds more significant effects of IPR regimes on innovative and entrepreneurial behavior using different measures — specifically, copyright enforcement intensity and legal formalism (which is related to delays and inconsistency in legal dispute resolution, see Djankov et al., 2003), and a contribution of the paper is to underline the usefulness of these alternative measures. In particular, copyright enforcement is broader than patent enforcement, and legal formalism could be important because IPR disputes when they occur tend to be costly8 and, if the outcome is uncertain (as in a high-formalism environment), the itself could become a means of “business stealing”.9 This underlines the importance for innovation not just of patent protection, but the protection of IP more broadly, including for example design features or trademarks.10 Evidence to distinguish among types of growth models typically relies on aggregate data — see Laincz and Peretto (2006), Ha and Howitt (2007) and Madsen (2008). Instead, this paper examines the links between innovation spending, entry, exit and spillovers, which are the key elements of the mechanisms underlying creative destruction models. As a result this paper underlines the empirical relevance of creative destruction models not just for interpreting aggregate data but for understanding the industrial organization of innovation. As such, it suggests that the most useful creative destruction models are those where knowledge spillovers benefit entrants and where new knowledge is mainly a substitute for knowledge rather than a complement. More broadly, the paper bridges the literature on the determinants of R&D, the determinants of entry and exit, and institutions. The sense that there should be a link between technical change, entry and exit goes back at least as far as Schumpeter (1934), and Geroski (1989), Audretsch (1991) and others study the link empirically, but none of these papers studies the role of institutions in the process of entry and exit, nor of innovative activity. Claessens and Laeven (2003) find that property rights (including intellectual property rights) enhance growth through improvements in resource allocation. The present paper finds evidence for one channel through which this might occur: the replacement of incumbents by innovative entrants. The idea that property rights encourage entrepreneurship dates back at least to De Soto (1987), but the emphasis on intellectual property rights is novel in this context to the author's knowledge. Section 2 presents the empirical strategy and introduces the data used in the paper. Section 3 reports empirical results concerning institutions and industry entry, exit and innovation spending. Section 4 examines the robustness of the result to different statistical procedures and to the inclusion of other institutional variables, as well as examining the impact of industry characteristics such as firm size or different moments of the industry R&D distribution. Section 5 concludes with a discussion of potential future work.

This paper takes a simple yet novel approach to identifying the relationship between knowledge spillovers, innovation and entrepreneurship, exploiting cross-country differences in the institutions that limit the use of knowledge spillovers for imitation. The results indicate that strong IPR enforcement is associated with disproportionately greater innovation spending, entry and exit in industries that have higher “desired” R&D intensity (the R&D intensity displayed when IPR protection is strong). This suggests that, as long as intellectual property can be controlled by the innovator, larger knowledge spillovers are associated with more innovation, and with innovative entry.26 Most importantly, they suggest that new knowledge is often a substitute (not a complement) to some aspect of prior knowledge, so that in a relative sense entrepreneurs benefit more from larger knowledge spillovers than incumbents.27 It is also important that patent protection does not seem to play much of a role: intellectual property is much broader than just patentable knowledge, so broader measures of IPR enforcement (copyright protection and non-formalism in the legal system) turn out to be the institutional variables that matter, which protect (or proxy for the protection of) IP in the form of texts, software, brands, designs, etc. as well as scientific or engineering knowledge. In future work, it could be interesting to see whether the source of knowledge spillovers matters for any of these results. For example, most knowledge spillovers are known to be among firms in the same industry, which is why we do not distinguish between “source” and “benefit” industries: however, patent citation or other data might allow a more careful identification of the importance of different sources of knowledge spillovers for the generation of new knowledge — see Cai and Li (2012) for work in this direction. Also, as mentioned, whether trade linkages interact with IPRs could be assessed using more disaggregated data on trade flows and benchmark R&D. It would be interesting to expand the sample to see whether any additional factors play a role in innovative and entrepreneurial behavior in developing economies. Finally, the results have policy implications, not least that weak IPRs and weak court systems may constitute a drag not only on innovation but also on entrepreneurship. Also, the findings that cross-firm spillovers matter and that they favor entrants, imply that the externalities typically identified in creative destruction models are present — the externality from the business-stealing effect and the externality from the fact that an innovator may inspire other innovators (or may suffer from imitation). Djankov et al. (2002) find that barriers to entry are strongly related to GDP per person, whereas traditional steady-state general equilibrium models for policy evaluation cannot account for such large effects (see Moscoso Boedo and Mukoyama, 2012). The results suggest this may be because, by reducing entrepreneurship, barriers to entry stifle an important channel of innovation, so that an endogenous growth framework may be more suited for policy analysis of this kind.