Working Paper No. 799

Creative Destruction and Productive Preemption

Published: June 10, 2009, revised September 2014Pages: 33Keywords: Acquisitions; Entrepreneurship; Innovation; Start-ups; Patent; Ownership; QualityJEL-codes: G24; L10; L20; M13; O30
Published version

Creative Destruction and Productive Preemption Pehr-Johan Norbäck, Lars Persson and Roger Svensson

We develop a theory of commercialization mode (entry or sale) of entrepreneurial inventions into oligopoly, and show that an invention of higher quality is more likely to be sold (or licensed) to an incumbent due to strategic product market effects on the sales price. Moreover, preemptive acquisitions by incumbents are shown to stimulate the process of creative destruction by increasing the entrepreneurial effort allocated to high-quality invention projects. Using detailed data on patents granted to small firms and individuals, we find evidence that high-quality inventions are often sold, and that they are sold under bidding competition.

Pehr-Johan Norbäck


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Lars Persson


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Roger Svensson


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Mob: +46 70 491 0166

Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

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In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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