Do stronger patents induce more innovation? Evidence from the 1988 Japanese patent law reforms

Does an expansion of patent scope induce more innovative effort by firms? W e examine responses to the Japanese patent reforms of 1988, Interviews with practitioners and professional documents for patent agents suggest the ref orms significantly expanded the scope of patent rights. However, econometri c analysis using both Japanese and U.S, patent data on 307 Japanese firms f inds no evidence of an increase in either R&D spending or innovative output that could plausibly be attributed to patent reform.