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Implications of Uncertain Patent Rights for German Start-ups’ Commercialization Activities and Access to External Capital

Author

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  • Diana Heger

    (HIS Economics in Frankfurt, Germany)

  • Katrin Hussinger

    (CREA, Université du Luxembourg)

Abstract

Start-ups may benefit in two ways from patenting their inventions: from the appropriation value and the certification effect of patents which reveals the ventures’ “quality” to investors. As long as the patent office’s grant decision is pending both benefits may not realize. We confirm for a data set of German start-ups that pending patent applications decrease the likelihood of market launch for new ventures. Regarding the certification effect, we find that pending patent applications attract risk-seeking investors, while more cautious investors do not react upon pending patent applications.

Suggested Citation

  • Diana Heger & Katrin Hussinger, 2016. "Implications of Uncertain Patent Rights for German Start-ups’ Commercialization Activities and Access to External Capital," DEM Discussion Paper Series 16-25, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:16-25
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    More about this item

    Keywords

    start-ups; patents; pending patent applications; access to finance; new product launch;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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