Quick or Broad Patents? Evidence from U.S. Startups

76 Pages Posted: 8 Mar 2020 Last revised: 9 Nov 2021

See all articles by Deepak Hegde

Deepak Hegde

New York University (NYU) - Leonard N. Stern School of Business

Alexander Ljungqvist

Centre for Economic Policy Research (CEPR); Stockholm School of Economics; European Corporate Governance Institute (ECGI); Research Institute of Industrial Economics (IFN)

Manav Raj

New York University (NYU) - Leonard N. Stern School of Business

Date Written: June 21, 2021

Abstract

We study the effects of patent scope and review times on startups and externalities on their rivals. We leverage the quasi-random assignment of U.S. patent applications to examiners and find that grant delays reduce a startup’s employment and sales growth, chances of survival, access to external capital, and future innovation. Delays also harm the growth, access to external capital, and follow-on innovation of the patentee’s rivals, suggesting that quick patents enhance both inventor rewards and generate positive externalities. Broader scope increases a startup’s future growth (conditional on survival) and innovation but imposes negative externalities on its rivals’ growth.

Keywords: Patents, innovation, scope, entrepreneurship, venture capital

JEL Classification: D23, G24, L26, O34

Suggested Citation

Hegde, Deepak and Ljungqvist, Alexander and Ljungqvist, Alexander and Raj, Manav, Quick or Broad Patents? Evidence from U.S. Startups (June 21, 2021). NYU Stern School of Business, Swedish House of Finance Research Paper No. 20-11, Available at SSRN: https://ssrn.com/abstract=3511268 or http://dx.doi.org/10.2139/ssrn.3511268

Deepak Hegde (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Alexander Ljungqvist

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Stockholm School of Economics ( email )

111 60 Stockholm
Sweden

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Manav Raj

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
376
Abstract Views
2,417
rank
103,214
PlumX Metrics