How Do Patent Laws Influence Innovation? Evidence from Nineteenth-Century World Fairs

This paper introduces a new internationally comparable data set that permits an empirical investigation of the effects of patent law on innovation. The data have been constructed from the catalogues of two 19th century world fairs: the Crystal Palace Exhibition in London, 1851, and the Centennial Exhibition in Philadelphia, 1876. They include innovations that were not patented, as well as those that were, and innovations from countries both with and without patent laws. I find no evidence that patent laws increased levels of innovative activity but strong evidence that patent systems influenced the distribution of innovative activity across industries. Inventors in countries without patent laws concentrated in industries where secrecy was effective relative to patents, e.g., food processing and scientific instruments. These results suggest that introducing strong and effective patent laws in countries without patents may have stronger effects on changing the direction of innovative activity than on raising the number of innovations.

[1]  Great Exhibition.  Official catalogue of the Great Exhibition of the Works of Industry of All Nations, 1851 , 1851 .

[2]  Jacob Schmookler,et al.  Invention and Economic Growth , 1967 .

[3]  Nineteenth Century Scientific Instruments , 1983 .

[4]  Tom Nicholas,et al.  Why Schumpeter was Right: Innovation, Market Power, and Creative Destruction in 1920s America , 2003, The Journal of Economic History.

[5]  Z. Griliches,et al.  Industry Effects and Appropriability Measures in the Stock Markets Valuation of R&D and Patents , 1987 .

[6]  Dani Rodrik,et al.  Patents, Appropriate Technology, and North-South Trade , 1989 .

[7]  A. Maddison,et al.  The World economy :a millennial perspective , 2001 .

[8]  E. Rothbarth,et al.  Causes of the Superior Efficiency of U.S.A. Industry as Compared with British Industry , 1946 .

[9]  David A. Moss,et al.  The American System , 2004 .

[10]  Thomas P. Hughes,et al.  American and British Technology in the Nineteenth Century: The Search for Labour-Saving Inventions , 1963 .

[11]  Fritz Machlup,et al.  The Patent Controversy in the Nineteenth Century , 1950, The Journal of Economic History.

[12]  F. Machlup.  The Supply of Inventors and Inventions , 1962 .

[13]  Nathan Rosenberg,et al.  Technology and American Economic Growth , 2020 .

[14]  N. Rosenberg.  Science, Invention and Economic Growth , 1974 .

[15]  Z. Griliches.  Patent Statistics as Economic Indicators: a Survey , 1990 .

[16]  G. Imbens,et al.  Bias-Corrected Matching Estimators for Average Treatment Effects , 2011 .

[17]  S. Gilfillan,et al.  Inventiveness by Nation: A Note on Statistical Treatment , 1930 .

[18]  Alan V. Deardorff.  Welfare Effects of Global Patent Protection , 1992 .

[19]  Z. Griliches,et al.  Econometric Models for Count Data with an Application to the Patents-R&D Relationship , 1984 .

[20]  A. Davies,et al.  From the American System to Mass Production, 1800-1932: The Development of Manufacturing Technology in the United States. , 1985 .

[21]  Petra Moser,et al.  What do Inventors Patent ? ∗ , 2004 .

[22]  E. Beatty.  The Political Basis of Industrialization in Mexico before 1911 , 1998, The Journal of Economic History.

[23]  Edith Penrose.  The economics of the international patent system , 1951 .

[24]  A. Maddison,et al.  Monitoring the world economy, 1820-1992 , 1995 .

[25]  P. Romer.  Increasing Returns and Long-Run Growth , 1986, Journal of Political Economy.

[26]  B. Khan,et al.  &Apos;Schemes of Practical Utility&Apos;: Entrepreneurship and Innovation Among &Apos;Great Inventors&Apos; in the United States, 1790-1865 , 1992 .

[27]  D. Acemoglu.  Technical Change, Inequality, and the Labor Market , 2000 .

[28]  J. Lerner.  150 Years of Patent Protection , 1999 .

[29]  G. Moschini.  Intellectual Property Rights and the World Trade Organization: Retrospect and Prospects , 2003 .

[30]  D. McFadden.  Conditional logit analysis of qualitative choice behavior , 1972 .

[31]  Kenneth L. Sokoloff,et al.  Inventive Activity in Early Industrial America: Evidence From Patent Records, 1790–1846 , 1988, The Journal of Economic History.

[32]  Jeremy Atack,et al.  The Patent System and Inventive Activity during the Industrial Revolution, 1750–1852. By H. I. Dutton. (Dover, N. H.: Manchester University Press, 1984. vii + 232 pp. $32.50.) , 1985 .

[33]  S. Winter,et al.  Appropriating the Returns from Industrial Research and Development , 1987 .

[34]  P. Klemperer.  How Broad Should the Scope of Patent Protection Be , 1990 .

[35]  Ariel Pakes,et al.  Estimates of the Value of Patent Rights in European Countries During Thepost-1950 Period , 1985 .

[36]  M. Kremer.  Population Growth and Technological Change: One Million B.C. to 1990 , 1993 .

[37]  W. Baumol.  Entrepreneurship: Productive, Unproductive, and Destructive , 1990, Journal of Political Economy.

[38]  Kenneth L. Sokoloff,et al.  Inventive Activity and the Market for Technology in the United States, 1840-1920 , 1999 .

[39]  M. Curti.  America at the World Fairs, 1851-1893 , 1950 .

[40]  Pravin K. Trivedi,et al.  Regression Analysis of Count Data , 1998 .

[41]  J. Lanjouw,et al.  Economic Consequences of a Changing Litigation Environment: The Case of Patents , 1994 .

[42]  D. Rubin.  ASSIGNMENT TO TREATMENT GROUP ON THE BASIS OF A COVARIATE , 1976 .

[43]  Eric Robinson,et al.  The Patent System and Inventive Activity during the Industrial Revolution, 1750–1852 by Harold I. Dutton (review) , 1984 .

[44]  Alberto Abadie,et al.  The Economic Costs of Conflict: A Case-Control Study for the Basque Country , 2001 .

[45]  S. Scotchmer,et al.  Standing on the Shoulders of Giants: Cumulative Research and the Patent Law , 1991 .

[46]  C. Shapiro,et al.  Optimal Patent Length and Breadth , 1990 .

[47]  Winfried Kretschmer.  Geschichte der Weltausstellungen , 1999 .

[48]  D. Acemoglu.  Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality , 1998 .

[49]  Josh Lerner,et al.  Patent Protection and Innovation Over 150 Years , 2002 .

[50]  C. I. Jones,et al.  The Shape of Production Function and the Direction of Technical Change , 2004 .

[51]  Richard R. Nelson,et al.  Appropriating the Returns from Industrial R&D , 1988 .

[52]  Alberto Abadie,et al.  The Economic Costs of Conflict: A Case Study of the , 2003 .

[53]  Jacob Schmookler,et al.  Economic Sources of Inventive Activity , 1962, The Journal of Economic History.

[54]  Kevin M. Murphy,et al.  The Allocation of Talent: Implications for Growth , 1990 .

[55]  P. Lindert.  Social Spending and Economic Growth , 2004 .

[56]  William D. Nordhaus,et al.  An Economic Theory of Technological Change , 1969 .

[57]  Gavin Wright,et al.  The Origins of American Industrial Success, 1879-1940 , 1990 .

[58]  B. Khan.  Property Rights and Patent Litigation in Early Nineteenth-Century America , 1995 .

[59]  E. Helpman.  Innovation, Imitation, and Intellectual Property Rights , 1992 .

[60]  H. Schmidbaur,et al.  Supramolecular chemistry: Going for gold , 2001, Nature.

[61]  Z. Griliches.  HYBRID CORN: AN EXPLORATION IN THE ECONOMIC OF TECHNOLOGICAL CHANGE , 1957 .

[62]  Nathan Rosenberg,et al.  The American System Of Manufactures , 1969 .

[63]  J. Rossman,et al.  The Motives of Inventors , 1931 .

[64]  C. Macleod.  Technological Revolutions in Europe: Historical Perspectives , 1998 .

[65]  Measurement of Economic Growth , 1947 .

[66]  M. Trajtenberg.  A Penny for Your Quotes : Patent Citations and the Value of Innovations , 1990 .

[67]  Najib Harabi.  Factors Affecting Research and Development - Results of a Survey in Swiss Industry , 1991 .

[68]  Ariel Pakes,et al.  Estimates of the Value of Patent Rights in European Countries During Thepost-1950 Period , 1985 .

[69]  D. Rubin,et al.  The central role of the propensity score in observational studies for causal effects , 1983 .

[70]  I. Cockburn,et al.  Do Patents Matter?: Empirical Evidence after GATT , 2000 .

[71]  Alun C. Davies,et al.  Revolution in Time: Clocks and the Making of the Modern World. , 1984 .