IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v40y2011i7p1016-1027.html
   My bibliography  Save this article

Does patenting help high-tech start-ups?

Author

Listed:
  • Helmers, Christian
  • Rogers, Mark

Abstract

Using data on all high- and medium-tech start-ups in the UK in 2000, this paper assesses the effect associated with a firm's decision to patent on a firm's subsequent growth between 2001 and 2005. We propose a new approach to addressing well known issues challenging identification of any patent effect: firm heterogeneity, simultaneity between firm performance and patenting, and sample selection. Our findings suggest that patentees have higher asset growth than non-patentees of between 8% and 27% per annum.

Suggested Citation

  • Helmers, Christian & Rogers, Mark, 2011. "Does patenting help high-tech start-ups?," Research Policy, Elsevier, vol. 40(7), pages 1016-1027, September.
    • Handle: RePEc:eee:respol:v:40:y:2011:i:7:p:1016-1027
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0048733311000680
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Christian Helmers & Mark Rogers, 2010. "Innovation and the Survival of New Firms in the UK," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 36(3), pages 227-248, May.
    2. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492, National Bureau of Economic Research, Inc.
    3. Ernst, Holger, 2001. "Patent applications and subsequent changes of performance: evidence from time-series cross-section analyses on the firm level," Research Policy, Elsevier, vol. 30(1), pages 143-157, January.
    4. Arora, Ashish & Ceccagnoli, Marco & Cohen, Wesley M., 2008. "R&D and the patent premium," International Journal of Industrial Organization, Elsevier, vol. 26(5), pages 1153-1179, September.
    5. Hicks, Diana & Hegde, Deepak, 2005. "Highly innovative small firms in the markets for technology," Research Policy, Elsevier, vol. 34(5), pages 703-716, June.
    6. Michael Pfaffermayr, 2007. "Firm Growth Under Sample Selection: Conditional σ-Convergence in Firm Size?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(4), pages 303-328, December.
    7. Thomas Astebro, 2003. "The Return to Independent Invention: Evidence of Risk Seeking, Extreme Optimism or Skewness-Loving," Post-Print hal-00480030, HAL.
    8. Klaus Kultti & Tuomas Takalo & Juuso Toikka, 2007. "Secrecy versus patenting," RAND Journal of Economics, RAND Corporation, vol. 38(1), pages 22-42, March.
    9. Jaffe, Adam B, 1989. "Real Effects of Academic Research," American Economic Review, American Economic Association, vol. 79(5), pages 957-970, December.
    10. 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.
    11. Laura Abramovsky & Rupert Harrison & Helen Simpson, 2007. "University Research and the Location of Business R&D," Economic Journal, Royal Economic Society, vol. 117(519), pages 114-141, March.
    12. Whitney K. Newey, 2007. "NONPARAMETRIC CONTINUOUS/DISCRETE CHOICE MODELS," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(4), pages 1429-1439, November.
    13. Mann, Ronald J. & Sager, Thomas W., 2007. "Patents, venture capital, and software start-ups," Research Policy, Elsevier, vol. 36(2), pages 193-208, March.
    14. Stephanie Robson & Greg Haigh, 2008. "First findings from the UK Innovation Survey 2007," Economic & Labour Market Review, Palgrave Macmillan;Office for National Statistics, vol. 2(4), pages 47-53, April.
    15. Arundel, Anthony & Kabla, Isabelle, 1998. "What percentage of innovations are patented? empirical estimates for European firms," Research Policy, Elsevier, vol. 27(2), pages 127-141, June.
    16. Sharon Belenzon & Tomer Berkovitz, 2010. "Innovation in Business Groups," Management Science, INFORMS, vol. 56(3), pages 519-535, March.
    17. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    18. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-245, September.
    19. Boldrin,Michele & Levine,David K., 2010. "Against Intellectual Monopoly," Cambridge Books, Cambridge University Press, number 9780521127264, September.
    20. Bronwyn H. Hall, 2007. "Patents and patent policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 23(4), pages 568-587, Winter.
    21. Gimmon, Eli & Levie, Jonathan, 2010. "Founder's human capital, external investment, and the survival of new high-technology ventures," Research Policy, Elsevier, vol. 39(9), pages 1214-1226, November.
    22. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Entry, Exit and Establishment Survival in UK Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 91-112, March.
    23. Juan Alcácer & Wilbur Chung, 2007. "Location Strategies and Knowledge Spillovers," Management Science, INFORMS, vol. 53(5), pages 760-776, May.
    24. Joshua S. Gans & David H. Hsu & Scott Stern, 2002. "When Does Start-Up Innovation Spur the Gale of Creative Destruction?," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 571-586, Winter.
    25. Mitali Das & Whitney K. Newey & Francis Vella, 2003. "Nonparametric Estimation of Sample Selection Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(1), pages 33-58.
    26. James J. Anton & Dennis A. Yao, 2004. "Little Patents and Big Secrets: Managing Intellectual Property," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 1-22, Spring.
    27. Sarah Kösters, 2010. "Subsidizing Start-Ups: Policy Targeting and Policy Effectiveness," Journal of Industry, Competition and Trade, Springer, vol. 10(3), pages 199-225, September.
    28. Dietmar Harhoff, 1999. "Firm Formation And Regional Spillovers - Evidence From Germany," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 8(1-2), pages 27-55.
    29. Thomas Astebro, 2003. "The Return to Independent Invention: Evidence of Unrealistic Optimism, Risk Seeking or Skewness Loving?," Economic Journal, Royal Economic Society, vol. 113(484), pages 226-239, January.
    30. Blind, Knut & Edler, Jakob & Frietsch, Rainer & Schmoch, Ulrich, 2006. "Motives to patent: Empirical evidence from Germany," Research Policy, Elsevier, vol. 35(5), pages 655-672, June.
    31. Simon Parker & David Storey & Arjen Witteloostuijn, 2010. "What happens to gazelles? The importance of dynamic management strategy," Small Business Economics, Springer, vol. 35(2), pages 203-226, September.
    32. Cédric Schneider & Reinhilde Veugelers, 2010. "On young highly innovative companies: why they matter and how (not) to policy support them," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(4), pages 969-1007, August.
    Full references (including those not matched with items on IDEAS)

    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. Elizabeth Webster & Paul H. Jensen, 2011. "Do Patents Matter for Commercialization?," Journal of Law and Economics, University of Chicago Press, vol. 54(2), pages 431-453.
    2. Hoenen, Sebastian & Kolympiris, Christos & Schoenmakers, Wilfred & Kalaitzandonakes, Nicholas, 2014. "The diminishing signaling value of patents between early rounds of venture capital financing," Research Policy, Elsevier, vol. 43(6), pages 956-989.
    3. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    4. Crass, Dirk & Garcia Valero, Francisco & Pitton, Francesco & Rammer, Christian, 2016. "Protecting innovation through patents and trade secrets: Determinants and performance impacts for firms with a single innovation," ZEW Discussion Papers 16-061, ZEW - Leibniz Centre for European Economic Research.
    5. Crass, Dirk & Valero, Francisco Garcia & Pitton, Francesco & Rammer, Christian, 2019. "Protecting Innovation Through Patents and Trade Secrets: Evidence for Firms with a Single Innovation," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 26(1), pages 117-156.
    6. Martin Huber, 2012. "Identification of Average Treatment Effects in Social Experiments Under Alternative Forms of Attrition," Journal of Educational and Behavioral Statistics, , vol. 37(3), pages 443-474, June.
    7. René Belderbos & Bart Leten & Shinya Suzuki, 2017. "Scientific research, firm heterogeneity, and foreign R&D locations of multinational firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(3), pages 691-711, September.
    8. Mohd Shadab Danish & Pritam Ranjan & Ruchi Sharma, 2022. "Assessing the Impact of Patent Attributes on the Value of Discrete and Complex Innovations," Papers 2208.07222, arXiv.org.
    9. Martin Huber & Giovanni Mellace, 2014. "Testing exclusion restrictions and additive separability in sample selection models," Empirical Economics, Springer, vol. 47(1), pages 75-92, August.
    10. Reinhilde Veugelers & Cédric Schneider, 2018. "Which IP strategies do young highly innovative firms choose?," Small Business Economics, Springer, vol. 50(1), pages 113-129, January.
    11. Bronwyn Hall & Christian Helmers & Mark Rogers & Vania Sena, 2014. "The Choice between Formal and Informal Intellectual Property: A Review," Journal of Economic Literature, American Economic Association, vol. 52(2), pages 375-423, June.
    12. Encaoua, David & Guellec, Dominique & Martinez, Catalina, 2006. "Patent systems for encouraging innovation: Lessons from economic analysis," Research Policy, Elsevier, vol. 35(9), pages 1423-1440, November.
    13. Gambardella, Alfonso, 2013. "The economic value of patented inventions: Thoughts and some open questions," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 626-633.
    14. Peng Huang & Marco Ceccagnoli & Chris Forman & D.J. Wu, 2009. "Participation in a Platform Ecosystem: Appropriability, Competition, and Access to the Installed Base," Working Papers 09-14, NET Institute, revised Sep 2009.
    15. Walter, Sascha G. & Schmidt, Arne & Walter, Achim, 2016. "Patenting rationales of academic entrepreneurs in weak and strong organizational regimes," Research Policy, Elsevier, vol. 45(2), pages 533-545.
    16. Malte Mosel, 2012. "The role of patents and secrecy for intellectual property protection: theory and evidence," Working Papers 117, Bavarian Graduate Program in Economics (BGPE).
    17. Malte Mosel, 2011. "Big patents, small secrets: how firms protect inventions when R&D outcome is heterogeneous," Working Papers 105, Bavarian Graduate Program in Economics (BGPE).
    18. Peter Huber & Harald Oberhofer & Michael Pfaffermayr, 2014. "Job creation and the intra-distribution dynamics of the firm size distribution," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 23(1), pages 171-197, February.
    19. Alfonso Gambardella & Dietmar Harhoff & Bart Verspagen, 2017. "The economic value of patent portfolios," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(4), pages 735-756, December.
    20. Jürgen Mihm & Fabian J. Sting & Tan Wang, 2015. "On the Effectiveness of Patenting Strategies in Innovation Races," Management Science, INFORMS, vol. 61(11), pages 2662-2684, November.

    More about this item

    Keywords

    Patents Start-ups Growth;

    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:respol:v:40:y:2011:i:7:p:1016-1027. 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: http://www.elsevier.com/locate/respol .

    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.