This Website uses cookies. By using this website you are agreeing to our use of cookies and to the terms and conditions listed in our data protection policy. Read more

Journal of Industrial Economics

Venture Capitalists and the Patenting of Innovations

Scientific Article in English
Reference
Fabrizi, Simona, Steffen Lippert, Pehr-Johan Norbäck and Lars Persson (2013). “Venture Capitalists and the Patenting of Innovations”. Journal of Industrial Economics 61(3), 623–659. doi.org/10.1111/joie.12028

Authors
Simona Fabrizi, Steffen Lippert, Pehr-Johan Norbäck, Lars Persson

We model patent-signaling by informed venture capitalists to incumbent acquirers of developed innovations. We show that, to signal, venture capitalists develop more patents with higher impact than incumbents would. A tightening of patenting requirements by the patent offices, such as an increase in the required inventive step, increases the pool of unprotected early-stage ideas, which venture capitalists are better at judging than incumbents, and decreases the number and breadth of patented claims needed to separate highly valuable from less valuable innovations. Consequently, such a tightening would make venture capitalists more likely to back entrepreneurs and increase entrepreneurial incentives to innovate.

Pehr-Johan Norbäck

+46 (0)8 665 4522
+46 (0)73 574 3379
pehr-johan.norback@ifn.se