Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 895: Entrepreneurial Commercialization Choices and the Interaction between IPR and Competition Policy

Joshua S. Gans () and Lars Persson ()
Additional contact information
Joshua S. Gans: Rotman School of Management, Postal: University of Toronto, ,
Lars Persson: Research Institute of Industrial Economics (IFN), Postal: P.-O. Box 55665, SE-102 15 Stockholm, Sweden

Abstract: This paper examines the interaction between intellectual property protection and competition policy on the choice of entrepreneurs with respect to commercialization as well as the rate of innovation. We find that stronger intellectual property protection makes it more likely that entrepreneurs will commercialize by cooperating with incumbents rather than competing with them. Consequently, we demonstrate that competition policy has a clearer role in promoting a higher rate of innovation in that event. Hence, we identify one reason why the strength of the two policies may be complements from the perspective of increasing the rate of entrepreneurial innovation.

Keywords: Entrepreneurs; Innovation; Commercialization; Intellectual property law; Competition law

JEL-codes: O31

29 pages, January 3, 2012

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