Journal of Comparative Economics

Volume 36, Issue 4, December 2008, Pages 694-704

The Effect of Patent Laws on Invention Rates: Evidence from Cross-country Panels

QiangChen

School of Economics, Shandong University, 27 Shanda Nanlu, Jinan, Shandong Province, 250100, PR China

There has been surprisingly little statistical evidence about the effect of patent laws on invention rates in the literature. In this paper, two data sets of major invention counts for the US and 14 Western European countries during 1750–1950 and 1590–1900 respectively are used to assess this effect empirically in two cross-country panels. Using Poisson regressions and negative binomial regressions, both panels point to a significant positive effect of patent laws on invention rates, after controlling for each country's economy size. This result is robust in different specifications of cross-country fixed effects and/or random effects models, and after dropping the UK and the US from the sample. Journal of Comparative Economics 36 (4) (2008) 694–704.