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Litigation risks and firms innovation dynamics after the IPO

Author

Listed:
  • Enrico Forti

    (University College London
    O’Malley School of Business)

  • Serena Morricone

    (SDA Bocconi School of Management)

  • Federico Munari

    (University of Bologna)

Abstract

An initial public offering (IPO) is a critical event in a firm’s life cycle which can reshape its innovation strategy. Research suggests that after going public firms experience an increase in patent productivity. Our paper explores perceived litigation risks as a determinant of this outcome by examining US semiconductor firms. Results show that perceived patent litigation risks are positively associated with patent productivity after the IPO. Interestingly, we also find that the amount of capital raised during the IPO is positively associated with patent productivity after the IPO, successfully replicating previous findings on this relationship. These results are robust to model specifications where we attempt to account for the dynamics of self-selection of firms into IPO by considering matched control firms with similar pre-IPO characteristics, but that never went public.

Suggested Citation

  • Enrico Forti & Serena Morricone & Federico Munari, 2021. "Litigation risks and firms innovation dynamics after the IPO," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(2), pages 291-313, June.
    • Handle: RePEc:spr:epolin:v:48:y:2021:i:2:d:10.1007_s40812-020-00161-y
    DOI: 10.1007/s40812-020-00161-y
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    More about this item

    Keywords

    Technology ventures; Initial public offering (IPO); Innovation; Patents; Litigation;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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