| This dissertation explores the economics of intellectual property rights (IPR), innovation, and antitrust policies. It comprises three essays on related topics. Essay one evaluates the effects of patent protection on pharmaceutical innovations for twenty-six countries that established pharmaceutical patent laws during 1978-2002. Controlling for country characteristics through matched sampling techniques to establish two proper comparison sets among ninety-two sampled countries and through country-pair fixed-effects regressions, this study yields robust results. National patent protection alone does not stimulate domestic innovation, as estimated by changes in citation-weighted U.S. patent awards, domestic R&D, and pharmaceutical industry exports. However, domestic innovation accelerates in countries with higher levels of economic development, educational attainment, and economic freedom. Additionally, there appears to be an optimal level of IPR regulation above which further enhancement reduces innovation. Essay two probes into the flip side of IPR---counterfeits and imitation. I model the pricing and marketing strategies of producers of authentic and counterfeit goods in a setting of oligopolistic competition under both complete and asymmetric information. I collect data from Chinese shoe companies from 1993-2004 to test the theoretical predictions. Exploiting the discontinuity of government enforcement efforts for the footwear sector in 1995 and the differences in authentic companies' relationships with the government as IVs, I measure the effects of counterfeit entry. The empirical results are consistent with the theoretical predictions. The main result is that low-quality counterfeit entrants induce authentic producers to both produce higher quality products and raise prices. Essay three, written jointly with Zorina Khan, examines the balance between patenting and antitrust regulations. Patent grants offer their owners a right of exclusion, whereas antitrust laws prohibit anticompetitive strategies, leading many scholars to posit the existence of a trade-off between the exercise of patent rights and federal or state competition policies. We present a propensity score analysis of the relationship between patenting, innovation, and federal antitrust enforcement towards U.S. manufacturing firms. The results suggest that the patent accumulation by manufacturing corporations is associated with a greater likelihood of federal antitrust charges, and this conditional probability has increased over time. |
