Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/88120
Authors: 
Heger, Diana
Hussinger, Katrin
Year of Publication: 
2013
Series/Report no.: 
ZEW Discussion Papers 13-095
Abstract: 
Classical patent literature assumes that patents grant well-defined legal rights to exclude others from practicing an invention. In this scenario, start-up companies benefit from the exclusive right to commercialize patent-protected inventions and the certification effect of patents which signals the ventures' 'quality' to investors. If the decision about patent applications is pending at the patent office patent rights become probabilistic and both effects may not realize. We show that start-up companies are reluctant to launch new products if patents are pending. Further, pending patents attract risk-seeking investors (venture capitalists), while more cautious investors (banks) do not react on pending patents.
Subjects: 
start-ups
patents
probabilistic patents
pending patents
access to finance
new product launch
JEL: 
L26
O31
O34
Document Type: 
Working Paper

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