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

Deepak Hegde, Alexander Ljungqvist and Manav Raj

The Review of Financial Studies, 2022, vol. 35, issue 6, 2705-2742

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 and innovation.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online

JEL-codes: D23 G24 L26 O34 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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