Come and take it: Patenting pedigree and tenacity, takeover defenses, and patent valuation in post-IPO firms

Pankaj C. Patel and Maria João Guedes

Journal of Business Research, 2025, vol. 186, issue C

Abstract: Drawing on the appropriability–appropriation framework and signaling theory, we hypothesize that post-IPO firms with higher patent quality use takeover defenses as levers to signal a willingness to allow appropriation through acquisitions. In a sample of 635 post-IPO firms with 56,605 patent approvals (1998–2014), if post-IPO firms secure approval for a high pedigree patent (cutting edge technology) or obtain a longer grant lag (tenacity), the stock market reaction is positive (negative) when anti-takeover defenses are lowered (raised) from the previous year. The findings carry implications for the appropriability–appropriation strategies of post-IPO firms and the merit of reducing takeover defenses for these firms.

Keywords: Post-IPO; Takeover defenses; Innovation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:186:y:2025:i:c:s0148296324004776

DOI: 10.1016/j.jbusres.2024.114973

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