Patents and the Success of Venture-Capital Backed Startups: Using Examiner Assignment to Estimate Causal Effects
28 Pages Posted: 22 Jul 2015
Date Written: July 20, 2015
I study how patents affect firm success (initial public offering or acquisition at a high price) in a sample of 2,191 U.S. startups applying for patent protection in the 24 months following their first round of venture capital funding. I observe both successful and unsuccessful patent applications and use a measure of patent examiner leniency as an instrument for getting patents. I find a positive effect of patents on firm success for life science firms but not for information technology firms.
Keywords: Patents, Entrepreneurship, Venture Capital, Patent Examiners, Acquisition, Initial Public Offering
JEL Classification: O34, G24, L26
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