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JAPAN'S SHIFT FROM PROCESS TO PRODUCT PATENTS IN THE PHARMACEUTICAL INDUSTRY AN EVENT STUDY OF THE IMPACT ON JAPANESE FIRMS
Author(s) -
KAWAURA AKIHIKO,
CROIX SUMNER J. LA
Publication year - 1995
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1995.tb01848.x
Subject(s) - pharmaceutical industry , event study , business , scope (computer science) , patent law , patent portfolio , portfolio , product (mathematics) , new product development , stock exchange , pharmaceutical manufacturing , industrial organization , marketing , intellectual property , law , finance , medicine , computer science , political science , pharmacology , biology , programming language , paleontology , context (archaeology) , geometry , mathematics
In 1975 Japan expanded the scope of its patent law by introducing product patents for newly developed chemical and pharmaceutical products. We use rate‐of‐return data from the Tokyo Stock Exchange for Japanese pharmaceutical companies to examine the impact of the change in the patent law. Our empirical findings indicate that the passage of the new patent law induced an excess return of approximately 26 percent to a portfolio of large pharmaceutical companies. Companies with R&D programs specializing in new product development experienced large gains, while companies with R&D programs specializing in imitative process patents experienced no gains.