Job market paper:

Sung, E.J.“The Heterogeneous Effects of Weakening Patents on Firm Innovation Strategy” (Target journal: Management Science)

Abstract: This study is grounded in the literature on the relation between patent strength and firm innovation, and focuses on how the ability to exclude that patents provide affects the rate and direction of innovation. Leveraging a shock created by the U.S. Supreme Court, I show that the common belief that weaker patents lead to fewer innovations is wrong, while accounting for the heterogeneous patent-related strategies. First, I examine court documents to find which stakeholders argue that weaker patents will foster/hinder innovation. The arguments made in court mirror the debate in the academic literature and show that expected consequences are contingent on firms’ characteristics and innovation strategies. Second, using a unique dataset of the entire population of French firms over 1996-2010 matched with their patents, I test the existence of the mechanisms evoked by each side of the debate and their effect on firm innovation. Using the reaction of firms that are not involved in the U.S. policymaking process but have stakes in the U.S, I examine firms’ reactions on two outcomes: patenting propensity and R&D investments. The results show that a reduction in excludability increases incentives to invest in innovation for large firms in complex products industries by reducing the need for defensive patenting. On the other hand, other firms use patents less as an appropriation mechanism when they become weaker. Nevertheless, investments in innovative activities remain high overall because they adapt by shifting the composition of their inventions and R&D investments.

Working papers:

Sung, E.J. and Walsh J.P “Complementarity between Public Support and Acquisition of External Knowledge on SME Innovation”

Abstract: Studies of innovation-related public support provide mixed results on its effectiveness for solving market failures. Recent work has revealed that public R&D subsidies result in behavioral change, including changes in firms’ uses of external knowledge. In parallel, the literature on open innovation has found evidence that external knowledge strategies impact firms’ innovative performance. Given their resources constraints, small and medium enterprises (SMEs) are a common target of public interventions, while also being increasingly exposed to open innovation practices. Using cross-sectional data of 3,121 Korean SMEs, we find evidence that public funding has a positive effect on innovation, and that this effect is mediated by an increase in the breadth of external knowledge used when the subsidies are administered. This effect is visible across industries but only for small firms. We find that, for Korean SMEs, this positive mediating effect reaches the point of decreasing returns only for medium sized firms.

Work in progress:

Sung, E.J. “Firms’ Influence on Intellectual Property Policymaking through the Courts: What Are Socio-economic Arguments Worth in the Face of Politics?”

Sung, E.J. “Winners and Losers of IP Policy: Firms’ Benefits from Participating in Policymaking”

Kingsley, G., Rogers, J., and Sung, E.J. “Streamlining Project Delivery through Risk Analysis”

Sung, E.J. and Flowers M.E. “Patents as (Noisy) Signal Strategies”