Template-Type: ReDIF-Paper 1.0
Title: Visibility of Technology and Cumulative Innovation: Evidence from Trade Secrets Laws
Author-Name: Bernhard Ganglmair
Author-Email: b.ganglmair@gmail.com
Author-Name: Imke Reimers
Author-Email: i.reimers@northeastern.edu

Classification-JEL: D80, O31, O34
Keywords: cumulative innovation; disclosure; self-disclosing inventions; Uniform Trade Secrets Act

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 effects on overall 
welfare - the result of a significant decline in follow-on innovation.

Note: 
Length: 61
Creation-Date: 2019-08
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp119
Handle: RePEc:bon:boncrc:CRCTR224_2019_119v1