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Quick or Broad Patents? Evidence from U.S. Startups

Author

Listed:
  • Deepak Hegde
  • Alexander Ljungqvist
  • Manav Raj

Abstract

We study the effects of patent scope and review times on startups and externalities on their rivals. We leverage the quasi-random assignment of U.S. patent applications to examiners and find that grant delays reduce a startup’s employment and sales growth, chances of survival, access to external capital, and future innovation. Delays also harm the growth, access to external capital, and follow-on innovation of the patentee’s rivals, suggesting that quick patents enhance both inventor rewards and generate positive externalities. Broader scope increases a startup’s future growth (conditional on survival) and innovation but imposes negative externalities on its rivals’ growth and innovation.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online

Suggested Citation

  • Deepak Hegde & Alexander Ljungqvist & Manav Raj, 2022. "Quick or Broad Patents? Evidence from U.S. Startups," The Review of Financial Studies, Society for Financial Studies, vol. 35(6), pages 2705-2742.
    • Handle: RePEc:oup:rfinst:v:35:y:2022:i:6:p:2705-2742.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhab097
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    Cited by:

    1. Righi, Cesare & Cannito, Davide & Vladasel, Theodor, 2023. "Continuing patent applications at the USPTO," Research Policy, Elsevier, vol. 52(4).
    2. Cesare Righi & Davide Cannito & Theodor Vladasel, 2023. "Continuing patent applications at the USPTO," Economics Working Papers 1855, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Cesare Righi & Davide Cannito & Theodor Vladasel, 2023. "Continuing Patent Applications at the USPTO," Working Papers 1382, Barcelona School of Economics.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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