Compulsory Licensing: Evidence from the Trading with the Enemy Act

A couple of Stanford academics have done some really interesting empirical research on the effects of compulsory licencing. Petra Moser and Alessandra Voena concluded that compulsory licensing increased domestic invention by at least 20 percent.Abstract:

"Compulsory licensing allows firms in developing countries to produce foreign-owned inventions without the consent of foreign patent owners. This paper uses an exogenous event of compulsory licensing after World War I under the Trading with the Enemy Act to examine the long run effects of compulsory licensing on domestic invention. Difference-in-differences analyses of nearly 200,000 chemical inventions suggest that compulsory licensing increased domestic invention by at least 20 percent."