Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/203119 
Year of Publication: 
2019
Series/Report no.: 
ZEW Discussion Papers No. 19-035
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
We use exogenous variation in the strength of trade secrets protection to show that a relative weakening of patents (compared to trade secrets) has a disproportionately negative effect on the disclosure of processes - inventions that are not otherwise visible to society. We develop a structural model of initial and follow-on innovation to determine the effects of such a shift in disclosure on overall welfare in industries characterized by cumulative innovation. We find that while stronger trade secrets encourage investment in R&D, they may have negative e ects on overall welfare - the result of a significant decline in follow-on innovation.
Subjects: 
cumulative innovation
disclosure
self-disclosing inventions
Uniform Trade Secrets Act
JEL: 
D80
O31
O34
Document Type: 
Working Paper

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