IDEAS home Printed from https://ideas.repec.org/a/eee/beexfi/v26y2020ics2214635019302059.html
   My bibliography  Save this article

Patent text similarity and cross-cultural venture-backed innovation

Author

Listed:
  • Trevor Rogers, F.

Abstract

Portfolio companies with cross-cultural venture-backing that produce patents which are textually more similar to industry peers also produce more patents and higher quality patents. 4.9 million cosine similarity measures between the patents of 958 venture-backed portfolio companies from 28 different nations provide results that are able to generalize beyond the English language with the addition of a cultural-linguistic distance measure. Latent Dirichlet allocation topic modeling applied to the patent text validates these categories, making these results robust against deviation between industries. The results provide a textual measure that venture capital firms from all nations can use to determine if the patents produced by their portfolio companies are the type that encourage greater innovation.

Suggested Citation

  • Trevor Rogers, F., 2020. "Patent text similarity and cross-cultural venture-backed innovation," Journal of Behavioral and Experimental Finance, Elsevier, vol. 26(C).
    • Handle: RePEc:eee:beexfi:v:26:y:2020:i:c:s2214635019302059
    DOI: 10.1016/j.jbef.2020.100319
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2214635019302059
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jbef.2020.100319?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hall, B. & Jaffe, A. & Trajtenberg, M., 2001. "The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools," Papers 2001-29, Tel Aviv.
    2. Kathleen Weiss Hanley, 2010. "The Information Content of IPO Prospectuses," Review of Financial Studies, Society for Financial Studies, vol. 23(7), pages 2821-2864, July.
    3. Thomas J. Chemmanur & Elena Loutskina & Xuan Tian, 2014. "Corporate Venture Capital, Value Creation, and Innovation," Review of Financial Studies, Society for Financial Studies, vol. 27(8), pages 2434-2473.
    4. Shai Bernstein & Xavier Giroud & Richard R. Townsend, 2016. "The Impact of Venture Capital Monitoring," Journal of Finance, American Finance Association, vol. 71(4), pages 1591-1622, August.
    5. Hsu, Po-Hsuan & Tian, Xuan & Xu, Yan, 2014. "Financial development and innovation: Cross-country evidence," Journal of Financial Economics, Elsevier, vol. 112(1), pages 116-135.
    6. M. Keith Chen, 2013. "The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets," American Economic Review, American Economic Association, vol. 103(2), pages 690-731, April.
    7. Gompers, Paul A., 1996. "Grandstanding in the venture capital industry," Journal of Financial Economics, Elsevier, vol. 42(1), pages 133-156, September.
    8. Tim Loughran & Bill Mcdonald, 2011. "When Is a Liability Not a Liability? Textual Analysis, Dictionaries, and 10‐Ks," Journal of Finance, American Finance Association, vol. 66(1), pages 35-65, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ascione, Grazia Sveva, 2023. "Technological diversity to address complex challenges: the contribution of American universities to sdgs," MPRA Paper 119452, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Onur Bayar & Emre Kesici, 2024. "The impact of social media on venture capital financing: evidence from Twitter interactions," Review of Quantitative Finance and Accounting, Springer, vol. 62(1), pages 195-224, January.
    2. Cornaggia, Jess & Mao, Yifei & Tian, Xuan & Wolfe, Brian, 2015. "Does banking competition affect innovation?," Journal of Financial Economics, Elsevier, vol. 115(1), pages 189-209.
    3. Zhu, Hui & Zhu, Steven X., 2017. "Corporate innovation and economic freedom: Cross-country comparisons," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 50-65.
    4. Bian, Bo & Li, Yingxiang & Nigro, Casimiro A., 2022. "Conflicting fiduciary duties and fire sales of VC-backed start-ups," LawFin Working Paper Series 35, Goethe University, Center for Advanced Studies on the Foundations of Law and Finance (LawFin).
    5. Cao, Chunfang & Li, Xiaohui & Li, Xiaoyang & Zeng, Cheng & Zhou, Xuan, 2021. "Diversity and inclusion: Evidence from corporate inventors," Journal of Empirical Finance, Elsevier, vol. 64(C), pages 295-316.
    6. Seong K. Byun & Jong-Min & Han Xia, 2021. "Incremental vs. Breakthrough Innovation: The Role of Technology Spillovers," Management Science, INFORMS, vol. 67(3), pages 1779-1802, March.
    7. Lei Kong, 2020. "Government Spending and Corporate Innovation," Management Science, INFORMS, vol. 66(4), pages 1584-1604, April.
    8. Huang, Yi-Hou & Liang, Woan-lih & Truong, Quang-Thai & Wang, Yanzhi, 2022. "No new tricks for old dogs? Old directors and innovation performance," Technological Forecasting and Social Change, Elsevier, vol. 179(C).
    9. Ching-Hung Chang & Qingqing Wu, 2021. "Board Networks and Corporate Innovation," Management Science, INFORMS, vol. 67(6), pages 3618-3654, June.
    10. Stephen G. Dimmock & Jiekun Huang & Scott J. Weisbenner, 2022. "Give Me Your Tired, Your Poor, Your High-Skilled Labor: H-1B Lottery Outcomes and Entrepreneurial Success," Management Science, INFORMS, vol. 68(9), pages 6950-6970, September.
    11. Chen, Jie & Leung, Woon Sau & Evans, Kevin P., 2016. "Are employee-friendly workplaces conducive to innovation?," Journal of Corporate Finance, Elsevier, vol. 40(C), pages 61-79.
    12. Moshirian, Fariborz & Tian, Xuan & Zhang, Bohui & Zhang, Wenrui, 2021. "Stock market liberalization and innovation," Journal of Financial Economics, Elsevier, vol. 139(3), pages 985-1014.
    13. He, Chao & Li, Yanxi & Zhu, Jiawei, 2022. "The effect of firm-level perception of uncertainty on innovation: Evidence from China’s listed firms," Economics Letters, Elsevier, vol. 221(C).
    14. Amor, Salma Ben & Kooli, Maher, 2020. "Do M&A exits have the same effect on venture capital reputation than IPO exits?," Journal of Banking & Finance, Elsevier, vol. 111(C).
    15. Cai, Kelly & Zhu, Hui, 2020. "Does going public in the U.S. facilitate corporate innovation of foreign firms?," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).
    16. Daniel Bradley & Incheol Kim & Xuan Tian, 2017. "Do Unions Affect Innovation?," Management Science, INFORMS, vol. 63(7), pages 2251-2271, July.
    17. Yongqiang Chu & Xuan Tian & Wenyu Wang, 2019. "Corporate Innovation Along the Supply Chain," Management Science, INFORMS, vol. 67(6), pages 2445-2466, June.
    18. Glaeser, Stephen, 2018. "The effects of proprietary information on corporate disclosure and transparency: Evidence from trade secrets," Journal of Accounting and Economics, Elsevier, vol. 66(1), pages 163-193.
    19. Li, Emma & Liao, Li & Wang, Zhengwei & Xiang, Hongyu, 2020. "Venture capital certification and customer response: Evidence from P2P lending platforms," Journal of Corporate Finance, Elsevier, vol. 60(C).
    20. Chen Lin & Sibo Liu & Gustavo Manso, 2021. "Shareholder Litigation and Corporate Innovation," Management Science, INFORMS, vol. 67(6), pages 3346-3367, June.

    More about this item

    Keywords

    Venture capital; Corporate innovation; Patents;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G40 - Financial Economics - - Behavioral Finance - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:beexfi:v:26:y:2020:i:c:s2214635019302059. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-behavioral-and-experimental-finance .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.