Do Patents Lead to Market Concentration and Excess Profits?

Despite the vigorous strengthening of the global patent system in recent years, not only in industrialized economies like the USA, but also in the developing world, there have been limited attempts to measure the rise in concentration levels due to the patent system. This working paper from Padmashree Gehl Sampath and Walter Park provides a first empirical assessment showing that concentration of patents does result in market concentration in certain sectors in the USA and contributes to greater returns for affiliates of U.S. companies in developing country markets of India, China, and Brazil.

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