IDEAS home Printed from https://ideas.repec.org/a/kap/sbusec/v50y2018i1d10.1007_s11187-017-9898-y.html
   My bibliography  Save this article

Which IP strategies do young highly innovative firms choose?

Author

Listed:
  • Reinhilde Veugelers

    (KU Leuven, Bruegel and CEPR)

  • Cédric Schneider

    (Copenhagen Business School)

Abstract

This paper describes and analyzes the strategies of young highly innovative companies to appropriate the returns from their innovations. Upon controlling for other firm and industry characteristics, we show that firms combining a young age and small scale with a high R&D intensive profile are more likely to use intellectual property (IP), specifically combining formal and informal appropriation mechanisms. They are especially more likely to choose secrecy in combination with formal IP. This holds primarily when they introduce more radical innovations new to the market.

Suggested Citation

  • 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.
    • Handle: RePEc:kap:sbusec:v:50:y:2018:i:1:d:10.1007_s11187-017-9898-y
    DOI: 10.1007/s11187-017-9898-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11187-017-9898-y
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11187-017-9898-y?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
    ---><---

    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. Reinganum, Jennifer F, 1983. "Uncertain Innovation and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 73(4), pages 741-748, September.
    2. Joshua Lerner, 1994. "The Importance of Patent Scope: An Empirical Analysis," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 319-333, Summer.
    3. Mairesse, Jacques & Mohnen, Pierre, 2010. "Using Innovation Surveys for Econometric Analysis," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1129-1155, Elsevier.
    4. Markus Reitzig & Phanish Puranam, 2009. "Value appropriation as an organizational capability: the case of IP protection through patents," Strategic Management Journal, Wiley Blackwell, vol. 30(7), pages 765-789, July.
    5. David Encaoua & Yassine Lefouili, 2010. "Choosing Intellectual Protection: Imitation, Patent Strength, and Licensing," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 241-271, National Bureau of Economic Research, Inc.
    6. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
    7. Bruno Cassiman & Reinhilde Veugelers, 2002. "R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium," American Economic Review, American Economic Association, vol. 92(4), pages 1169-1184, September.
    8. Enrico Santarelli & Marco Vivarelli, 2007. "Entrepreneurship and the process of firms’ entry, survival and growth," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 16(3), pages 455-488, June.
    9. Zoltan J. Acs & David B. Audretsch, 2008. "Innovation in Large and Small Firms: An Empirical Analysis," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 1, pages 3-15, Edward Elgar Publishing.
    10. Dirk Czarnitzki & Julie Delanote, 2013. "Young Innovative Companies: the new high-growth firms?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(5), pages 1315-1340, October.
    11. Henkel, Joachim & Rønde, Thomas & Wagner, Marcus, 2015. "And the winner is—Acquired. Entrepreneurship as a contest yielding radical innovations," Research Policy, Elsevier, vol. 44(2), pages 295-310.
    12. Pellegrino, Gabriele & Piva, Mariacristina & Vivarelli, Marco, 2012. "Young firms and innovation: A microeconometric analysis," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 329-340.
    13. Zvi Griliches, 1984. "R&D, Patents, and Productivity," NBER Books, National Bureau of Economic Research, Inc, number gril84-1, July.
    14. Bruno van Pottelsberghe de la Potterie & Didier François, 2009. "The Cost Factor in Patent Systems," Journal of Industry, Competition and Trade, Springer, vol. 9(4), pages 329-355, December.
    15. Mann, Ronald J. & Sager, Thomas W., 2007. "Patents, venture capital, and software start-ups," Research Policy, Elsevier, vol. 36(2), pages 193-208, March.
    16. Lahr, Henry & Mina, Andrea, 2016. "Venture capital investments and the technological performance of portfolio firms," Research Policy, Elsevier, vol. 45(1), pages 303-318.
    17. Rebecca Henderson, 1993. "Underinvestment and Incompetence as Responses to Radical Innovation: Evidence from the Photolithographic Alignment Equipment Industry," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 248-270, Summer.
    18. repec:adr:anecst:y:2005:i:79-80:p:10 is not listed on IDEAS
    19. Bronwyn H. Hall & Christian Helmers & Mark Rogers & Vania Sena, 2013. "The importance (or not) of patents to UK firms," Oxford Economic Papers, Oxford University Press, vol. 65(3), pages 603-629, July.
    20. Gaetan de Rassenfosse & Bruno van Pottelsberghe de la Potterie, 2013. "The Role Of Fees In Patent Systems: Theory And Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 27(4), pages 696-716, September.
    21. Hoenig, Daniel & Henkel, Joachim, 2015. "Quality signals? The role of patents, alliances, and team experience in venture capital financing," Research Policy, Elsevier, vol. 44(5), pages 1049-1064.
    22. William J. Baumol, 2004. "Education for Innovation: Entrepreneurial Breakthroughs vs. Corporate Incremental Improvements," NBER Working Papers 10578, National Bureau of Economic Research, Inc.
    23. David Encaoua & Yassine Lefouili, 2005. "Choosing Intellectual Protection: Imitation, Patent Strength and Licensing Agreement," Annals of Economics and Statistics, GENES, issue 79-80, pages 241-271.
    24. Scott Shane, 2001. "Technological Opportunities and New Firm Creation," Management Science, INFORMS, vol. 47(2), pages 205-220, February.
    25. 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.
    26. Bruno Cassiman & Reinhilde Veugelers, 2006. "In Search of Complementarity in Innovation Strategy: Internal R& D and External Knowledge Acquisition," Management Science, INFORMS, vol. 52(1), pages 68-82, January.
    27. Arundel, Anthony, 2001. "The relative effectiveness of patents and secrecy for appropriation," Research Policy, Elsevier, vol. 30(4), pages 611-624, April.
    28. 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.
    29. García-Quevedo, José & Pellegrino, Gabriele & Vivarelli, Marco, 2014. "R&D drivers and age: Are young firms different?," Research Policy, Elsevier, vol. 43(9), pages 1544-1556.
    30. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 783-832.
    31. Annamaria Conti & Jerry Thursby & Marie Thursby, 2013. "Patents as Signals for Startup Financing," Journal of Industrial Economics, Wiley Blackwell, vol. 61(3), pages 592-622, September.
    32. Leiponen, Aija & Byma, Justin, 2009. "If you cannot block, you better run: Small firms, cooperative innovation, and appropriation strategies," Research Policy, Elsevier, vol. 38(9), pages 1478-1488, November.
    33. Bronwyn H. Hall & Christian Helmers & Mark Rogers & Vania Sena, 2013. "The importance (or not) of patents to UK firms," Oxford Economic Papers, Oxford University Press, vol. 65(3), pages 603-629, July.
    34. 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.
    35. 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.
    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. Albert N. Link & Martijn Hasselt, 2020. "Exploring the impact of R&D on patenting activity in small women-owned and minority-owned entrepreneurial firms," Small Business Economics, Springer, vol. 54(4), pages 1061-1066, April.
    2. David B. Audretsch & Maksim Belitski & Rosa Caiazza & Erik E. Lehmann, 2020. "Knowledge management and entrepreneurship," International Entrepreneurship and Management Journal, Springer, vol. 16(2), pages 373-385, June.
    3. Maksim Belitski & Rosa Caiazza & Erik E. Lehmann, 2021. "Knowledge frontiers and boundaries in entrepreneurship research," Small Business Economics, Springer, vol. 56(2), pages 521-531, February.
    4. Dirk Czarnitzki & Marek Giebel, 2021. "Financial Constraints for R&D and Innovation: New Evidence from a Survey Experiment," Working Papers of Department of Management, Strategy and Innovation, Leuven 683800, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
    5. Colombelli, Alessandra & Belitski, Maksim & D’Amico, Elettra, 2023. "Artificial Intelligence and Firm Innovation: The Resource-Allocation Perspective," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 202304, University of Turin.
    6. KATO Masatoshi & Nicolas LEGENDRE & YOSHIDA Hiroki, 2022. "Does VC Investor Type Matter? Determinants and effects of VC backing for new firms in Japan," Discussion papers 22117, Research Institute of Economy, Trade and Industry (RIETI).
    7. Baum, Christopher F. & Lööf, Hans & Stephan, Andreas & Viklund-Ros, Ingrid, 2022. "Innovation by start-up firms: The role of the board of directors for knowledge spillovers," Research Policy, Elsevier, vol. 51(1).
    8. D’Amico, Elettra & Belitski, Maksim & Colombelli, Alessandra, 2023. "Evaluating Internal and External Knowledge Sources in Adopting Artificial Intelligence," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 202303, University of Turin.
    9. D’Amico, Elettra & Belitski, Maksim & Colombelli, Alessandra, 2023. "Evaluating Internal and External Knowledge Sources in Adopting Artificial Intelligence," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202315, University of Turin.
    10. Colombelli, Alessandra & Grilli, Luca & Minola, Tommaso & Mrkajic, Boris, 2020. "To what extent do young innovative companies take advantage of policy support to enact innovation appropriation mechanisms?," Research Policy, Elsevier, vol. 49(10).
    11. Fábio De Oliveira Paula & Jorge Ferreira Da Silva, 2019. "The Role Of The Appropriability Mechanisms For The Innovative Success Of Portuguese Small And Medium Enterprises," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(04), pages 1-23, May.
    12. Audretsch, David B. & Belitski, Maksim, 2020. "The role of R&D and knowledge spillovers in innovation and productivity," European Economic Review, Elsevier, vol. 123(C).
    13. Colombelli, Alessandra & Belitski, Maksim & D’Amico, Elettra, 2023. "Artificial Intelligence and Firm Innovation: The Resource-Allocation Perspective," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202316, University of Turin.
    14. Masatoshi Kato & Koichiro Onishi & Yuji Honjo, 2022. "Does patenting always help new firm survival? Understanding heterogeneity among exit routes," Small Business Economics, Springer, vol. 59(2), pages 449-475, August.
    15. Haoyang Song & Jianhua Hou & Yang Zhang, 2022. "Patent protection: does it promote or inhibit the patented technological knowledge diffusion?," Scientometrics, Springer;Akadémiai Kiadó, vol. 127(5), pages 2351-2379, May.

    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. Colombelli, Alessandra & Grilli, Luca & Minola, Tommaso & Mrkajic, Boris, 2020. "To what extent do young innovative companies take advantage of policy support to enact innovation appropriation mechanisms?," Research Policy, Elsevier, vol. 49(10).
    2. 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.
    3. 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.
    4. Michele Cincera & Reinhilde Veugelers, 2013. "Exploring Europe's R&D deficit relative to the US: Differences in the rates of return to R&D of young leading R&D firms," Working Papers TIMES² 2013 - 001, ULB -- Universite Libre de Bruxelles.
    5. Capponi, Giovanna & Criscuolo, Paola & Martinelli, Arianna & Nuvolari, Alessandro, 2019. "Profiting from innovation: Evidence from a survey of Queen's Awards winners," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 155-169.
    6. 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.
    7. Hyo Kang & Wyatt Lee, 2022. "How innovating firms manage knowledge leakage: A natural experiment on the threat of worker departure," Strategic Management Journal, Wiley Blackwell, vol. 43(10), pages 1961-1982, October.
    8. Klein, Michael A., 2022. "The reward and contract theories of patents in a model of endogenous growth," European Economic Review, Elsevier, vol. 147(C).
    9. David Audretsch & Agustí Segarra & Mercedes Teruel, 2014. "Why don't all young firms invest in R&D?," Small Business Economics, Springer, vol. 43(4), pages 751-766, December.
    10. Buss, Philipp & Peukert, Christian, 2015. "R&D outsourcing and intellectual property infringement," Research Policy, Elsevier, vol. 44(4), pages 977-989.
    11. Sara Amoroso & Albert N. Link, 2021. "Intellectual property protection mechanisms and the characteristics of founding teams," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(9), pages 7329-7350, September.
    12. Lee, Honggi, 2023. "The heterogeneous effects of patent scope on licensing propensity," Research Policy, Elsevier, vol. 52(3).
    13. Jussi Heikkilä & Annika Lorenz, 2018. "Need for speed? Exploring the relative importance of patents and utility models among German firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 27(1), pages 80-105, January.
    14. Bernhard Ganglmair & Imke Reimers, 2019. "Visibility of Technology and Cumulative Innovation: Evidence from Trade Secrets Laws," CRC TR 224 Discussion Paper Series crctr224_2019_119v1, University of Bonn and University of Mannheim, Germany.
    15. Bruno Cassiman & Masako Ueda, 2006. "Optimal Project Rejection and New Firm Start-ups," Management Science, INFORMS, vol. 52(2), pages 262-275, February.
    16. Coad, Alex & Segarra, Agustí & Teruel, Mercedes, 2016. "Innovation and firm growth: Does firm age play a role?," Research Policy, Elsevier, vol. 45(2), pages 387-400.
    17. Karin Beukel & Minyuan Zhao, 2018. "IP litigation is local, but those who litigate are global," Journal of International Business Policy, Palgrave Macmillan, vol. 1(1), pages 53-70, June.
    18. Masatoshi Kato & Koichiro Onishi & Yuji Honjo, 2022. "Does patenting always help new firm survival? Understanding heterogeneity among exit routes," Small Business Economics, Springer, vol. 59(2), pages 449-475, August.
    19. Gabriele Pellegrino & Mariacristina Piva & Marco Vivarelli, 2015. "How do new entrepreneurs innovate?," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(3), pages 323-341, September.
    20. 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.

    More about this item

    Keywords

    Young innovative companies; Appropriability; Patents; Secrecy;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • 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

    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:kap:sbusec:v:50:y:2018:i:1:d:10.1007_s11187-017-9898-y. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.