Is There a Role for Patents in the Financing of New Innovative Firms?

In: Industrial and Corporate Change, Vol. 28, Issue 3, 2019, pp. 657–680

Max Planck Institute for Innovation & Competition Research Paper No. 18-06

39 Pages Posted: 18 May 2018 Last revised: 12 Aug 2019

See all articles by Bronwyn H. Hall

Bronwyn H. Hall

University of California at Berkeley; National Bureau of Economic Research (NBER); Institute for Fiscal Studies (IFS); Max Planck Institute for Innovation and Competition

Date Written: May 1, 2018

Abstract

It is argued by many that one of the benefits of the patent system is that it creates a property right to invention that enables firms to obtain financing for the development of that invention. In this paper, I review the reasons why ownership of knowledge assets might be useful in attracting finance and then survey the empirical evidence on patent ownership and its impact on the ability of firms to obtain further financing at different stages of their development, both starting up and after becoming established. Studies that attempt to separately identify the role of patent rights and the underlying quality of the associated innovation(s) will be emphasized, although these are rather rare.

Keywords: patents, venture capital, startup financing, patent market, PAE

Suggested Citation

Hall, Bronwyn H., Is There a Role for Patents in the Financing of New Innovative Firms? (May 1, 2018). In: Industrial and Corporate Change, Vol. 28, Issue 3, 2019, pp. 657–680; Max Planck Institute for Innovation & Competition Research Paper No. 18-06. Available at SSRN: https://ssrn.com/abstract=3177027 or http://dx.doi.org/10.2139/ssrn.3177027

Bronwyn H. Hall (Contact Author)

University of California at Berkeley ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

HOME PAGE: http://emlab.berkeley.edu/users/bhhall/index.html

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Institute for Fiscal Studies (IFS)

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Max Planck Institute for Innovation and Competition

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Munich, Bayern 80539
Germany

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