Headlines 2016

The advantage of selling an invention instead of turning it into a business


Selling to incumbent firms encourage creators to focus on high-quality research projects, write Pehr-Johan Norbäck, Lars Persson and Roger Svensson in a blog post for the London School of Economics' Business Review. The research results "suggest that industry policies that disfavour innovation for sale over innovation for entry may be harmful," writes Norbäck, Persson and Svensson. They propose policies to improve the merger and acquisition market: "... making the tax system neutral between keeping and selling a firm, or improving the legal system to reduce the transaction costs associated with acquisitions in order to ensure a bidding competition over target firms".

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