External capital access and new product launch in start-up firms with uncertain intellectual property rights
Diana Heger and
Katrin Hussinger ()
No 13-095, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research
Classical patent literature assumes that patents grant well-defined legal rights to exclude others from practicing an invention. In this scenario, start-up companies benefit from the exclusive right to commercialize patent-protected inventions and the certification effect of patents which signals the ventures' 'quality' to investors. If the decision about patent applications is pending at the patent office patent rights become probabilistic and both effects may not realize. We show that start-up companies are reluctant to launch new products if patents are pending. Further, pending patents attract risk-seeking investors (venture capitalists), while more cautious investors (banks) do not react on pending patents.
Keywords: start-ups; patents; probabilistic patents; pending patents; access to finance; new product launch (search for similar items in EconPapers)
JEL-codes: L26 O31 O34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ent, nep-ino, nep-ipr, nep-pr~, nep-law and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:13095
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