ETLA Discussion Papers, The Research Institute of the Finnish Economy (ETLA) 1025
This study analyses how patent quality impacts the likelihood of acquisition. If a firm owns high quality or valuable patents, other firms may be interested in buying the firm to obtain the ownership of these patents. To proxy the quality of patents, we use both forward and backward citations. Moreover, our data enables us to distinguish between cross-border and domestic targets. Multinomial logit estimations show that owning patents correlates with becoming a target for a foreign firm. The same does not apply to targets for domestic firms. However, we do not find evidence that the quality of patents impacts the likelihood of becoming target for a domestic or a foreign firm.