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

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  • Svensson, Roger

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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  • Svensson, Roger, 2007. "Commercialization of patents and external financing during the R&D phase," Research Policy, Elsevier, vol. 36(7), pages 1052-1069, September.
  • Handle: RePEc:eee:respol:v:36:y:2007:i:7:p:1052-1069
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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, revised 12 Sep 2014.
    2. Josh Lerner & Joacim Tåg, 2013. "Institutions and venture capital," Industrial and Corporate Change, Oxford University Press, vol. 22(1), pages 153-182, February.
    3. Jun, Seung-Pyo & Kim, Sang-Gook & Park, Hyun-Woo, 2017. "The mismatch between demand and beneficiaries of R&D support programs for SMEs: Evidence from Korean R&D planning programs," Technological Forecasting and Social Change, Elsevier, vol. 116(C), pages 286-298.
    4. Svensson, Roger, 2006. "Innovation Performance and Government Financing," Working Paper Series 664, Research Institute of Industrial Economics, revised 30 Sep 2006.
    5. P. Mohnen & F. Palm & S. Loeff & A. Tiwari, 2008. "Financial Constraints and Other Obstacles: are they a Threat to Innovation Activity?," De Economist, Springer, vol. 156(2), pages 201-214, June.
    6. Stanislav Zaichenko, 2012. "Transferring R&D Outputs to Industry: Strategies of R&D Organizations," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 6(4), pages 48-58.
    7. Pontus Braunerhjelm & Roger Svensson, 2010. "The inventor’s role: was Schumpeter right?," Journal of Evolutionary Economics, Springer, vol. 20(3), pages 413-444, June.
    8. Svensson, Roger, 2008. "Renewal of Patents and Government Financing," Working Paper Series 759, Research Institute of Industrial Economics.
    9. Haufler, Andreas & Norbäck, Pehr-Johan & Persson, Lars, 2014. "Entrepreneurial innovations and taxation," Journal of Public Economics, Elsevier, vol. 113(C), pages 13-31.
    10. 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.
    11. Roger Svensson, 2011. "Publicly-Funded R&D Programs and Survival of Patents," Post-Print hal-00762896, HAL.

    More about this item

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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