Does patenting increase the probability of being acquired? Evidence from cross-border and domestic acquisitions
AbstractA firm that owns a patent has a legal right to exclude. Applying for the patent, however, discloses discovery of an invention by the firm. Both the ownership of the right and the disclosure of the discovery expose the firm to an acquisition, because other firms may be interested in buying the right or the invention for a number of reasons. This idea of patent-driven mergers and acquisitions (M&As) is tested using a large sample of Finnish firms that are mostly private and small. It is found that patenting by a Finnish firm is positively correlated with the probability that the firm is acquired by a foreign firm.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal Applied Financial Economics.
Volume (Year): 15 (2005)
Issue (Month): 14 ()
Contact details of provider:
Web page: http://www.tandf.co.uk/journals/routledge/09603107.html
Other versions of this item:
- Ali-Yrkkö, Jyrki & Hyytinen, Ari & Pajarinen, Mika, 2004. "Does Patenting Increase the Probability of Being Acquired? Evidence from Cross-border and Domestic Acquisitions," Discussion Papers 891, The Research Institute of the Finnish Economy.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Granstrand, Ove & Sjolander, Soren, 1990. "The acquisition of technology and small firms by large firms," Journal of Economic Behavior & Organization, Elsevier, vol. 13(3), pages 367-386, June.
- Granstrand, Ove & Sjölander, Sören, 1990. "The Acquisition of Technology and Small Firms by Large Firms," Working Paper Series 213, Research Institute of Industrial Economics.
- Ted O'Donoghue & Suzanne Scotchmer & Jacques-François Thisse, 1998. "Patent Breadth, Patent Life, and the Pace of Technological Progress," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 1-32, 03.
- Andrade, Gregor & Stafford, Erik, 2004. "Investigating the economic role of mergers," Journal of Corporate Finance, Elsevier, vol. 10(1), pages 1-36, January.
- Hall, Bronwyn H & Jaffe, Adam B & Trajtenberg, Manuel, 2001.
"The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools,"
CEPR Discussion Papers
3094, C.E.P.R. Discussion Papers.
- Hall, B. & Jaffe, A. & Trajtenberg, M., 2001. "The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools," Papers 2001-29, Tel Aviv.
- Bronwyn H. Hall & Adam B. Jaffe & Manuel Trajtenberg, 2001. "The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools," NBER Working Papers 8498, National Bureau of Economic Research, Inc.
- La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 2000.
"Investor protection and corporate governance,"
Journal of Financial Economics,
Elsevier, vol. 58(1-2), pages 3-27.
- Lerner, Josh & Merges, Robert P, 1998. "The Control of Technology Alliances: An Empirical Analysis of the Biotechnology Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 125-56, June.
- Stulz, ReneM. & Johnson, Herb, 1985. "An analysis of secured debt," Journal of Financial Economics, Elsevier, vol. 14(4), pages 501-521, December.
- Nancy T. Gallini, 2002. "The Economics of Patents: Lessons from Recent U.S. Patent Reform," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 131-154, Spring.
- Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-29, May.
- Damien NEVEN & George SIOTIS, 1995.
"Technology Sourcing and FDI in the EC : An Empirical Evaluation,"
Cahiers de Recherches Economiques du DÃ©partement d'EconomÃ©trie et d'Economie politique (DEEP)
9508, Université de Lausanne, Faculté des HEC, DEEP.
- Neven, D. & Siotis, G., 1996. "Technology sourcing and FDI in the EC: An empirical evaluation," International Journal of Industrial Organization, Elsevier, vol. 14(5), pages 543-560, July.
- Gregor Andrade & Mark Mitchell & Erik Stafford, 2001. "New Evidence and Perspectives on Mergers," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 103-120, Spring.
- Ronan G. Powell, 1997. "Modelling Takeover Likelihood," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 24(7&8), pages 1009-1030.
- Mitchell, Mark L. & Mulherin, J. Harold, 1996. "The impact of industry shocks on takeover and restructuring activity," Journal of Financial Economics, Elsevier, vol. 41(2), pages 193-229, June.
- Gort, Michael, 1969. "An Economic Disturbance Theory of Mergers," The Quarterly Journal of Economics, MIT Press, vol. 83(4), pages 624-42, November.
- Kamien, Morton I., 1992. "Patent licensing," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 11, pages 331-354 Elsevier.
- Palepu, Krishna G., 1986. "Predicting takeover targets : A methodological and empirical analysis," Journal of Accounting and Economics, Elsevier, vol. 8(1), pages 3-35, March.
- Berger, Philip G & Ofek, Eli, 1996. " Bustup Takeovers of Value-Destroying Diversified Firms," Journal of Finance, American Finance Association, vol. 51(4), pages 1175-1200, September.
- Ali-Yrkkö, Jyrki, 2006. "Technology Sourcing Through Acquisitions Do High Quality Patents Attract Acquires?," Discussion Papers 1025, The Research Institute of the Finnish Economy.
- Frey, Rainer & Hussinger, Katrin, 2006.
"The role of technology in M&As: a firm-level comparison of cross-border and domestic deals,"
Discussion Paper Series 1: Economic Studies
2006,45, Deutsche Bundesbank, Research Centre.
- Frey, Rainer & Hussinger, Katrin, 2006. "The Role of Technology in M&As: A Firm Level Comparison of Cross-Border and Domestic Deals," ZEW Discussion Papers 06-69, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Wagner, S. & Cockburn, I., 2010.
"Patents and the survival of Internet-related IPOs,"
Elsevier, vol. 39(2), pages 214-228, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.