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http://hdl.handle.net/10419/24705
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| Title: | | Patent Protection, Market Uncertainty, and R&D Investment  |
| Authors: | | Toole, Andrew A. Czarnitzki, Dirk |
| Issue Date: | | 2008 |
| Series/Report no.: | | ZEW Discussion Papers 06-056 [rev.] |
| Abstract: | | Real options investment theory predicts current investment falls as uncertainty about market returns increases. In the case of R&D investment, which is usually considered an irreversible form of investment, this effect should be quite pronounced. This paper tests the real options prediction about the R&D investment-uncertainty relationship and further considers how patent protection influences this relationship. Patent protection, by limiting the threat of market rivalry, should mitigate firm-specific uncertainty and stimulate current R&D investment. Our empirical results support both the prediction of real options theory and the mitigating effect of patent protection. |
| Subjects: | | Real Options Theory Uncertainty R&D Intellectual Property Protection Censored Regression |
| JEL: | | O31 O33 C25 |
| older Version: | | http://hdl.handle.net/10419/24511 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des ZEW ZEW Discussion Papers
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