The commercial value of basic knowledge depends on the arrival of follow-up developments mostly from outside the boundaries of the inventing firm. Private returns would depend on the extent the inventing firm internalizes these follow-up developments. Such internalization is less likely to occur...

It is shown that spillovers can enhance private returns to innovation if they feed back into the dynamic research of the original inventor (Internalized spillovers), but will always reduce private returns, if the original inventor does not benefit from the advancements other inventors build into...

This paper examines the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation. Recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate the returns to R&D, despite the strengthening of US...

Economists view intellectual property rights (IPRs) as policy tools for encouraging innovation. There are many types of IPRs and of institutions concerned with their administration. We begin by outlining how these complex and varied rights are supposed to work and how they interact with other...