Thursday, January 21, 2016

A Literature Review of Patenting and Economic History

Petra Moser (NYU Stern) has posted Patents and Innovation in Economic History on SSRN. Is is a literature review of economic history papers relating to patents and innovation. In general, I think the prestige market undervalues literature reviews, because who cares that you can summarize what everyone in the field should already know about (or can look up on their own)? In practice, though, I think there is great value in such reviews. First, knowing about articles and having them listed, organized, and discussed are two different things. Second, not everyone is in the field, nor does everyone take the time to look up every article. Even in areas where I consider myself a subject matter expert (to avoid critique, I'll leave out which), a well done literature review will often turn up at least one writing I was unaware of or frame prior work in a way I hadn't thought of.

And so it is with this draft; the abstract is below. Many different studies are discussed, dating back to the 1950's. They are organized by topic and many are helpfully described. As you would expect, more space is devoted to Moser's work and the analysis and critique tends to favor her point of view on the evidence (though she does point out some limitations of her own work). To that, my response is if you don't like the angle or focus, write your own literature review that highlights all the other studies and their viewpoints. Better yet, do some Bayesian analysis!
A strong tradition in economic history, which primarily relies on qualitative evidence and statistical correlations, has emphasized the importance of intellectual property rights in encouraging innovation. Recent improvements in empirical methodology - through the creation of new data sets and advances in identification - challenge this traditional view. These empirical results provide a more nuanced view of the effects of intellectual property, which suggests that, whenever intellectual property rights have been too broad or too strong, they have discouraged innovation. This paper summarizes existing results from this research agenda and presents some open questions.

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