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The Impact of Intellectual Property Types on the Performance of Business Start-ups in the USA

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  • Bernadette Power
  • Gavin C Reid

Abstract

Using a large, longitudinal panel (2004-2011) of USA start-ups this paper shows the extent to which IP types (e.g. trademarks, patents, copyrights, outward licensing) enhance multidimensional performance. An ordered probit analysis (with random effects), corrected for sample selection bias, estimates performance to derive the following conclusions. First, trademarks and out-licensing IP types increase a firm’s chances of being a high performer, confirming the importance of certain forms of IP protection for start-ups. Second, patenting significantly reduces the chances of being a high performer, suggesting patenting has limited performance benefits for start-ups. Third, few performance synergies exist in the joint use of IP types, suggesting that strong complementarities among IP types are limited. While out-licensing patents and out-licensing copyrights certainly increase performance, out-licensing patents and out-licensing trademarks actually diminish it. Further, registering more trademarks and outlicensing more trademarks also diminishes performance, suggesting start-up firms should keep trademarks in-house.

Suggested Citation

  • Bernadette Power & Gavin C Reid, 2021. "The Impact of Intellectual Property Types on the Performance of Business Start-ups in the USA," Working Papers wp523, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp523
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    File URL: https://www.jbs.cam.ac.uk/cbrwp523/
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    Cited by:

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    2. Huang, Shuangfa & Battisti, Martina & Pickernell, David, 2023. "The roles of innovation strategy and founding team diversity in new venture growth," Journal of Business Research, Elsevier, vol. 158(C).

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    More about this item

    Keywords

    Performance; firm start-ups; intellectual property; out-licensing; complementarities;
    All these keywords.

    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • 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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