Quick or Broad Patents? Evidence from U.S. Startups

Alexander Ljungqvist (), Deepak Hegde and Manav Raj

No 16320, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the effects of patent scope and review times on startups and externalities on their rivals. We leverage the quasi-random assignment of U.S. patent applications to examiners and find that grant delays reduce a startup’s employment and sales growth, chances of survival, access to external capital, and future innovation. Delays also harm the growth, access to external capital, and follow-on innovation of the patentee’s rivals, suggesting that quick patents enhance both inventor rewards and generate positive externalities. Broader scope increases a startup’s future growth (conditional on survival) and innovation but imposes negative externalities on its rivals’ growth.

Keywords: Patents; Innovation; Scope; entrepreneurship; Venture capital (search for similar items in EconPapers)
JEL-codes: D23 G24 L26 O34 (search for similar items in EconPapers)
Date: 2021-07
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