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Commercialization of patents and external financing during the R&D phase

Listed author(s):
  • Svensson, Roger

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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Article provided by Elsevier in its journal Research Policy.

Volume (Year): 36 (2007)
Issue (Month): 7 (September)
Pages: 1052-1069

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Handle: RePEc:eee:respol:v:36:y:2007:i:7:p:1052-1069
Contact details of provider: Web page: http://www.elsevier.com/locate/respol

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  3. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 287-343 National Bureau of Economic Research, Inc.
  4. Schankerman, Mark & Pakes, Ariel, 1986. "Estimates of the Value of Patent Rights in European Countries during the Post-1950 Period," Economic Journal, Royal Economic Society, vol. 96(384), pages 1052-1076, December.
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  7. 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.
  8. 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.
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  11. repec:fth:harver:1473 is not listed on IDEAS
  12. Pakes, Ariel S, 1986. "Patents as Options: Some Estimates of the Value of Holding European Patent Stocks," Econometrica, Econometric Society, vol. 54(4), pages 755-784, July.
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  15. Goldfarb, Brent & Henrekson, Magnus, 2001. "Bottom-Up vs. Top-Down Policies towards the Commercialization of University Intellectual Property," SSE/EFI Working Paper Series in Economics and Finance 463, Stockholm School of Economics, revised 26 May 2002.
  16. Samuel Kortum & Josh Lerner, 2000. "Assessing the Contribution of Venture Capital to Innovation," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 674-692, Winter.
  17. Steven N. Kaplan & Per Stromberg, 2001. "Venture Capitals As Principals: Contracting, Screening, and Monitoring," American Economic Review, American Economic Association, vol. 91(2), pages 426-430, May.
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  20. Per Botolf Maurseth, 2005. "Lovely but dangerous: The impact of patent citations on patent renewal," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(5), pages 351-374.
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