Sequential innovation, patent policy, and the dynamics of the replacement effect
研究专利长度和正向保护如何影响企业研发投入、领导企业持久性和市场结构，发现过度保护会通过延迟投资和减少研发企业数量来降低创新速度。
Abstract I study how patent policy—characterized by patent length and forward protection—affects Research and Development (R&D) dynamics, leadership persistence, and market structure. Firms' R&D investments increase as the patent's expiration date approaches. Through forward protection, followers internalize the leader's replacement effect. In protective systems, this internalization is substantial, reversing Arrow's traditional result: followers invest less than leaders at every moment of the patent's life. I study the policy that maximizes innovative activity. Overly protective policies decrease innovation pace through two mechanisms: delaying firms' investments toward the end of the patent's life and decreasing the number of firms performing R&D.