Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/81428 
Year of Publication: 
2009
Series/Report no.: 
IFN Working Paper No. 799
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
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.
Subjects: 
Acquisitions
Entrepreneurship
Innovation
Start-ups
Patent
Ownership
Quality
JEL: 
G24
L10
L20
M13
O30
Document Type: 
Working Paper

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