The IPR System, Venture Capital and Capital Markets – Contributions and Distortions of Small Firm Innovation?
AbstractThis study explores how capital markets, exemplified by venture capital, and recent trends in the patent system may influence innovation activity and the financing of small businesses. Specifically it is evaluated if there are costs and distortions of incentives related hereto. Additionally, the positive contribution of venture capital in the patenting process is investigated. It is found that trends at a macro economic level is nowadays of major importance for the patenting and innovation behaviour and financing of firms. Patenting has increased in scale, scope and trade volume, patents have become a strategic asset to an extent that may de-link it from innovation activities. The IPR-system may render distortions of innovation activities facilitated by these trends. These distortions may impose costs on the overall function of the innovation system, costs that are unequally distributed among firms as small firms are bearing most of the burdens. The results points to new perspectives on strategy that are important to management of firms and investment funds.
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Bibliographic InfoPaper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 08-03.
Date of creation: 2008
Date of revision:
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Web page: http://www.druid.dk/
Small firms; venture capital; IPR;
Find related papers by JEL classification:
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-05 (All new papers)
- NEP-CFN-2008-05-05 (Corporate Finance)
- NEP-ENT-2008-05-05 (Entrepreneurship)
- NEP-INO-2008-05-05 (Innovation)
- NEP-IPR-2008-05-05 (Intellectual Property Rights)
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