Implications of Uncertain Patent Rights for German Start-ups’ Commercialization Activities and Access to External Capital

Diana Heger () and Katrin Hussinger
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Diana Heger: HIS Economics in Frankfurt, Germany

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: Start-ups may benefit in two ways from patenting their inventions: from the appropriation value and the certification effect of patents which reveals the ventures’ “quality” to investors. As long as the patent office’s grant decision is pending both benefits may not realize. We confirm for a data set of German start-ups that pending patent applications decrease the likelihood of market launch for new ventures. Regarding the certification effect, we find that pending patent applications attract risk-seeking investors, while more cautious investors do not react upon pending patent applications.

Keywords: start-ups; patents; pending patent applications; access to finance; new product launch (search for similar items in EconPapers)
JEL-codes: L26 O31 O34 (search for similar items in EconPapers)
Date: 2016
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Journal Article: Implications of uncertain patent rights for German start-ups’ commercialisation activities and access to external capital (2017)
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