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Commercialization of Patents and External Financing during the R&D-Phase

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  • Svensson, Roger

    ()
    (The Research Institute of Industrial Economics)

Abstract

Using a unique database on individual Swedish patents, a survival model estimates how different factors influence the time it takes until commercialization starts. To the best of my knowledge, such an analysis has not been undertaken before. For external financing of patent projects and small technology-based firms, Sweden has during long time relied on government support rather than private venture capital firms. The empirical results show that the larger share of the patent-owners’ costs during the R&D-phase that are covered by government financial support, the longer time it takes until the patents are commercialized. It seems like the government financing creates a pool of patents with bad perspectives of commercialization. The reasons to the bad performance are: 1) the design of the government loans, where the patent owner can escape from paying back the loan if the project failures; and 2) the competence and incentives of the government institutions, which are not profit maximizing. A policy implication is therefore that the government should either change the conditions of the loans or, preferably, stop acting as a venture capital firm. The government should instead facilitate private solutions and the growth of private venture capital firms.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 624.

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Length: 26 pages
Date of creation: 23 Jun 2004
Date of revision:
Handle: RePEc:hhs:iuiwop:0624

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Keywords: Patents; R&D; Commercialization; External Financing; Survival Models;

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References

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  1. Goldfarb, Brent & Henrekson, Magnus, 2001. "Bottom-Up vs. Top-Down Policies towards the Commercialization of University Intellectual Property," Working Paper Series in Economics and Finance 463, Stockholm School of Economics, revised 26 May 2002.
  2. repec:fth:harver:1473 is not listed on IDEAS
  3. Svensson, Roger, 2002. "Commercialization of Swedish Patents – A Pilot Study in the Medical and Hygiene Sector," Working Paper Series 583, Research Institute of Industrial Economics.
  4. Jaffe, Adam B & Lerner, Josh, 2001. "Reinventing Public R&D: Patent Policy and the Commercialization of National Laboratory Technologies," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 167-98, Spring.
  5. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
  6. Zvi Griliches, 1991. "Patent Statistics as Economic Indicators: A Survey," NBER Working Papers 3301, National Bureau of Economic Research, Inc.
  7. Morgan, Robert P & Kruytbosch, Carlos & Kannankutty, Nirmala, 2001. " Patenting and Invention Activity of U.S. Scientists and Engineers in the Academic Sector: Comparisons with Industry," The Journal of Technology Transfer, Springer, vol. 26(1-2), pages 173-83, January.
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Cited by:
  1. Norbäck, Pehr-Johan & Persson, Lars & Svensson, Roger, 2009. "Creative Destruction and Productive Preemption," Working Paper Series 799, Research Institute of Industrial Economics.
  2. Pontus Braunerhjelm & Roger Svensson, 2010. "The inventor’s role: was Schumpeter right?," Journal of Evolutionary Economics, Springer, vol. 20(3), pages 413-444, June.
  3. Svensson, Roger, 2008. "Renewal of Patents and Government Financing," Working Paper Series 759, Research Institute of Industrial Economics.
  4. Sybrand Schim van der Loeff & Pierre Mohnen & Franz Palm & Amaresh K. Tiwari, 2008. "Financial Constraints and other Obstacles: Are they a Threat to Innovation Activity?," CESifo Working Paper Series 2204, CESifo Group Munich.
  5. Färnstrand Damsgaard, Erika & Norbäck, Pehr-Johan & Persson, Lars & Vasconcelos, Helder, 2012. "Why Entrepreneurs Choose Risky R&D Projects - But Still Not Risky Enough," Working Paper Series 926, Research Institute of Industrial Economics.
  6. Svensson, Roger, 2006. "Innovation Performance and Government Financing," Working Paper Series 664, Research Institute of Industrial Economics, revised 30 Sep 2006.
  7. Lerner, Josh & Tåg, Joacim, 2012. "Institutions and Venture Capital," Working Paper Series 897, Research Institute of Industrial Economics.
  8. repec:dgr:unumer:2008006 is not listed on IDEAS

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