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Accessibility and Materialization of Firm Innovation

60 Pages Posted: 3 Jan 2015 Last revised: 21 Aug 2017

Ning Jia

Tsinghua University - School of Economics & Management

Xuan Tian

Tsinghua University - PBC School of Finance

Date Written: August 20, 2017

Abstract

We examine the effect of a firm’s accessibility to the United States Patent and Trademark Office (USPTO), captured by the firm’s distance to it, on the materialization of the firm’s innovation output. An increase in a firm’s distance to the USPTO results in a longer time-to-patent-grant and a reduction in the quantity of patents owned. Accessibility is important for a firm’s exploratory, but not for exploitative, innovation activity. The relation is more pronounced for first-time patent applicants, firms with a larger degree of information asymmetry, and before the launch of an electronic filing system. Finally, we show that market reacts positively to the opening of USPTO regional offices for innovation-intensive firms that enjoy a shorter distance to the USPTO, and that the contribution of a firm’s patent portfolio to its equity value is larger when the firm is located closer to the USPTO. Our study demonstrates one strategy that firms can use to facilitate the materialization of their innovation outcomes, and highlights the importance of accessibility in fostering an effective innovation ecosystem.

Keywords: patenting; USPTO; accessibility; distance; information asymmetry

JEL Classification: O31; O32; G30;

Suggested Citation

Jia, Ning and Tian, Xuan, Accessibility and Materialization of Firm Innovation (August 20, 2017). Kelley School of Business Research Paper No. 15-19. Available at SSRN: https://ssrn.com/abstract=2544583 or http://dx.doi.org/10.2139/ssrn.2544583

Ning Jia

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

Xuan Tian (Contact Author)

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengfu Road
Haidian District
Beijing 100083
China
+86-10-62794103 (Phone)

HOME PAGE: http://xuantian.info/

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