What Is a Patent Worth? Evidence from the U.S. Patent 'Lottery'

Reprint No. 2020:22

Author(s): Joan Farre-Mensa, Deepak Hede and Alexander LjungqvistYear: 2020 Title: Journal of Finance Volume (No.): 75 (2) Pages: 639–682
Online article (restrictions may apply)

We provide evidence on the value of patents to startups by leveraging the quasi‐random assignment of applications to examiners with different propensities to grant patents. Using unique data on all first‐time applications filed at the U.S. Patent Office since 2001, we find that startups that win the patent “lottery” by drawing lenient examiners have, on average, 55% higher employment growth and 80% higher sales growth five years later. Patent winners also pursue more, and higher quality, follow‐on innovation. Winning a first patent boosts a startup’s subsequent growth and innovation by facilitating access to funding from venture capitalists, banks, and public investors.

Farre-Mensa, Joan, Deepak Hede and Alexander Ljungqvist (2020), "What Is a Patent Worth? Evidence from the U.S. Patent 'Lottery'". Journal of Finance 75(2), 639–682.

Interdisciplinary European Studies

The European Union and the Return of the Nation State


This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

About the book


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