Perspectives from Law, Economics and Political Economy
Edited by Meir Perez Pugatch
Chapter 6: Intellectual Property Policies and Scale Neutrality: Strategic Management Implications for SMEs
Grant E. Isaac I. INTRODUCTION As the title of this volume suggests, there are many debates associated with intellectual property policies which can be assessed from legal, economic and political economy perspectives. Often, the unit of analysis for these debates is the nation-state level where the questions posed deal with issues such as the welfare gains and losses resulting from intellectual property policies as well as the governance of intellectual property regimes. Yet, given the fact that intellectual property policies are – to a large part – designed to encourage innovation among private organizations, adopting an organization-level unit of analysis is crucial. Doing so deepens the assessment of intellectual property policies by explicitly linking the legal, economic and political economy perspectives with the strategic management perspective. An important intellectual property policy debate at the level of the organization has to do with the scale neutrality of various intellectual property policy instruments such as patents. In a general sense, policy instruments that are scale neutral create symmetric strategic incentives for ﬁrms regardless of ﬁrm size (measured in terms of revenues and/or employees). Policy instruments that are not scale neutral create asymmetric strategic incentives for ﬁrms based on their size (Weidenbaum, 2004; Persson and Tabellini, 2000; Bernheim and Bagwell, 1988). Consider ﬁrst scale-neutral policy instruments such as constituent policy instruments that are designed to level the playing ﬁeld for all actors regardless of scale. Firm-level environmental regulations are often cited as an example of constituent policy instruments where polluters – regardless of size – must reduce...
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