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When patents matter: The impact of competition and patent age on the performance contribution of intellectual property rights protection

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  • Maresch, Daniela
  • Fink, Matthias
  • Harms, Rainer

Abstract

The question whether patenting impacts patenting firms' subsequent financial performance is important for technology-oriented companies. However, relevant research has led to contradictory results. We strive to overcome this impasse by introducing innovation competition and patent age as moderators of patents' performance contribution into the discourse. Based on a sample of 975 cases from diverse industries, we find strong support for our arguments. In line with our expectations, the results show that the number of patents granted, the degree of patent competition, and the timeliness of a patent contribute positively to financial performance. Moderation analysis nuances our findings by showing that the impact of patent protection on financial performance is stronger when the patent competition is stronger and the patents are younger.

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  • Maresch, Daniela & Fink, Matthias & Harms, Rainer, 2016. "When patents matter: The impact of competition and patent age on the performance contribution of intellectual property rights protection," Technovation, Elsevier, vol. 57, pages 14-20.
    • Handle: RePEc:eee:techno:v:57-58:y:2016:i::p:14-20
    DOI: 10.1016/j.technovation.2015.11.009
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    Cited by:

    1. Bernadette Power & Gavin C Reid, 2021. "The Impact of Intellectual Property Types on the Performance of Business Start-ups in the USA," Working Papers wp523, Centre for Business Research, University of Cambridge.
    2. Agnieszka Kleszcz & Krzysztof Rusek, 2022. "Has EU accession boosted patents performance in the EU-13? -- A critical evaluation using causal impact analysis with Bayesian structural time-series models," Papers 2201.09878, arXiv.org.
    3. Othmani, Abdelhafidh & Ben Yedder, Nadia & Bakari, Sayef, 2023. "The Cointegration Relationship between Patent, Domestic Investment and Economic Growth in United States of America," MPRA Paper 118245, University Library of Munich, Germany.
    4. Grzegorczyk Tomasz & Głowiński Robert, 2020. "Patent management strategies: A review," Journal of Economics and Management, Sciendo, vol. 40(2), pages 36-51, June.
    5. Chih-Yi, Su & Bou-Wen, Lin, 2021. "Attack and defense in patent-based competition: A new paradigm of strategic decision-making in the era of the fourth industrial revolution," Technological Forecasting and Social Change, Elsevier, vol. 167(C).
    6. Xue Yang & Hao Zhang & Die Hu & Bingde Wu, 2023. "The timing dilemma: understanding the determinants of innovative startups’ patent collateralization for loans," Small Business Economics, Springer, vol. 60(1), pages 371-403, January.
    7. Agnieszka Kleszcz & Krzysztof Rusek, 2022. "Has EU Accession Boosted Patent Performance in the EU-13? A Critical Evaluation Using Causal Impact Analysis with Bayesian Structural Time-Series Models," Forecasting, MDPI, vol. 4(4), pages 1-16, October.
    8. Youngseong Koo & Keuntae Cho, 2021. "The Relationship between Patents, Technology Transfer and Desorptive Capacity in Korean Universities," Sustainability, MDPI, vol. 13(9), pages 1-14, May.
    9. Gary, Robert F. & Fink, Matthias & Belousova, Olga & Marinakis, Yorgos & Tierney, Robert & Walsh, Steven T., 2020. "An introduction to the field of abundant economic thought," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    10. Sweet, Cassandra & Eterovic, Dalibor, 2019. "Do patent rights matter? 40 years of innovation, complexity and productivity," World Development, Elsevier, vol. 115(C), pages 78-93.
    11. Ulrike Michel-Schneider, 2022. "Patenting - A Cost Management Perspective," Proceedings of Economics and Finance Conferences 12915571, International Institute of Social and Economic Sciences.
    12. van der Waal, Mark B. & Feddema, Jelle J. & van de Burgwal, Linda H.M., 2023. "Mapping the broad societal impact of patents," Technovation, Elsevier, vol. 128(C).
    13. Taglialatela, Jonathan & Barontini, Roberto, 2024. "SMEs and patents: Is it worth it? A longitudinal analysis of the patent-performance relationship," Journal of Economics and Business, Elsevier, vol. 128(C).
    14. Alina Okun & Randall Valentine, 2020. "Examining the Relationship between Earnings and Patent Filings among Pharmaceutical Companies in Asia," International Journal of Economics and Financial Issues, Econjournals, vol. 10(6), pages 217-221.
    15. Wei‐Kang Wang & Wen‐Min Lu & Qian Long Kweh & Hoang Tu Nhi Truong, 2020. "What do U.S. biopharmaceutical companies get from patents and research and development spikes for their dynamic corporate performance?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(5), pages 762-770, July.
    16. Papazoglou, Michalis E. & Spanos, Yiannis E., 2021. "“Influential knowledge and financial performance: The role of time and rivals’ absorptive capacity”," Technovation, Elsevier, vol. 102(C).

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