Intellectual property protection mechanisms and the characteristics of founding teams

Intellectual property protection mechanisms (IPPMs) are critical to fostering science, technology, and innovation, and their relevance has grown enormously with the increased trade in goods and services involving patentable technologies. Scholars have investigated factors that facilitate or hinder the use of such IP protection strategies by identifying related country, sector, and firm characteristics. However, the extant literature has overlooked the role of the characteristics of a firm’s founding team on the choice of an IPPM strategy. Using data from a large cross-sectional sample of European small, young, and innovative firms, we show that controlling for firm size, R&D intensity, and other firm and market effects, founding team characteristics, such as gender and education, greatly influence the choice of a strategy. In particular, in line with the general finding that women patent less, we find that firms with more women in the founding team patent less than firms with more male founders; but contrary to the literature that has primarily focused on large firms, we find that as the number of female founders increases, small, young entrepreneurial firms tend to use less informal IPPMs rather than formal IPPMs. We also find, within the context of entrepreneurship policy, that the education and not experience of founding team members is a main predictor of IP adoption.