Trademarks in Entrepreneurial Firm Success: Empirical Evidence from Venture Backed Private Firms and Initial Public Offerings

81 Pages Posted: 14 Oct 2020

See all articles by Thomas J. Chemmanur

Thomas J. Chemmanur

Boston College - Carroll School of Management

Harshit Rajaiya

University of Ottawa - Telfer School of Management

Xuan Tian

Tsinghua University - PBC School of Finance

Qianqian Yu

Lehigh University

Date Written: October 13, 2020

Abstract

We analyze the role of trademarks in entrepreneurial finance, hypothesizing that trademarks play two important roles: a "protective" role, leading to better product market performance; and an "informational" role, signaling higher firm quality to investors. We develop testable hypotheses relating the trademarks held by private firms to characteristics of venture capital (VC) investment in them, their probability of successful exit, IPO and secondary market valuations, institutional investor IPO participation, post-IPO operating performance, and post-IPO information asymmetry. We test these hypotheses using a large and unique dataset of trademarks held by VC-backed private firms and present causal evidence supporting them.

Suggested Citation

Chemmanur, Thomas J. and Rajaiya, Harshit and Tian, Xuan and Yu, Qianqian, Trademarks in Entrepreneurial Firm Success: Empirical Evidence from Venture Backed Private Firms and Initial Public Offerings (October 13, 2020). PBCSF-NIFR Research Paper, Proceedings of Paris December 2020 Finance Meeting EUROFIDAI - ESSEC, Available at SSRN: https://ssrn.com/abstract=3710521 or http://dx.doi.org/10.2139/ssrn.3710521

Thomas J. Chemmanur

Boston College - Carroll School of Management ( email )

Finance Department, 436 Fulton Hall
Carroll School of Management, Boston College
Chestnut Hill, MA 02467-3808
United States
617-552-3980 (Phone)
617-552-0431 (Fax)

HOME PAGE: http://https://www2.bc.edu/thomas-chemmanur/

Harshit Rajaiya

University of Ottawa - Telfer School of Management ( email )

136 Jean-Jacques Lussier Street
Ottawa, Ontario K1N 6N5
Canada

Xuan Tian

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/

Qianqian Yu (Contact Author)

Lehigh University ( email )

621 Taylor Street
Bethlehem, PA 18015
United States

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