Patents, Thickets and the Financing of Early-Stage Firms: Evidence from the Software Industry
Iain Cockburn () and
Megan MacGarvie ()
Journal of Economics & Management Strategy, 2009, vol. 18, issue 3, 729-773
"Legal changes in the patentability of software since the mid 1990s have resulted in a substantial increase in the number of patents on software inventions. We focus here on the impact of transactions costs associated with patent "thickets" on new entrants' interactions with the capital markets. Using data on the financing of entrants into 27 narrowly defined software markets, we show that start-up software companies operating in markets characterized by denser patent thickets saw their initial acquisition of VC funding delayed relative to firms in markets less affected by patents after the mid 1990s. The relationship between patent thickets and subsequent financing activity such as IPO or acquisition is more complex, but there is weak evidence that firms without patents became less likely to go public if they operated in a market characterized by patent thickets. Firms with patents are more likely to be funded or experience a liquidity event. However, the application for a patent appears to matter more than its grant." Copyright (c) 2009 Wiley Periodicals, Inc..
References: Add references at CitEc
Citations View citations in EconPapers (41) Track citations by RSS feed
Downloads: (external link)
http://www.blackwell-synergy.com/servlet/useragent ... &year=2009&part=null link to full text (text/html)
Access to full text is restricted to subscribers.
Working Paper: Patents, Thickets, and the Financing of Early-Stage Firms: Evidence from the Software Industry (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:bla:jemstr:v:18:y:2009:i:3:p:729-773
Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=1058-6407&site=1
Access Statistics for this article
More articles in Journal of Economics & Management Strategy from Wiley Blackwell
Series data maintained by Wiley-Blackwell Digital Licensing ().