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The Fate Of Patents: An Exploratory Analysis Of Patents As Ipo Signals Of Reputational Advantage

Author

Listed:
  • Basir, Nada

    (Schulich School of Business, York University.)

  • Beyhaghi, Mehdi

    (College of Business, University of Texas at San Antonio)

  • Mohammadi, Ali

    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

Abstract

Drawing on the reputation literature and signaling theory, this article builds on work that looks at patents as reputation signals. We build a multi-industry database of patents that expire due to lack of maintenance fee payments and test for a relationship between these patents and the firm’s IPO date. We find a significant and positive relationship between the likelihood of patents expiring due to lack of maintenance fee payments and the time to IPO. We also find that patents associated with firms which are not venture capital backed, are more likely to expire. Our findings suggest that patents that are used for signaling intentions are more likely to be underutilized. Implications for research and policy are discussed.

Suggested Citation

  • Basir, Nada & Beyhaghi, Mehdi & Mohammadi, Ali, 2014. "The Fate Of Patents: An Exploratory Analysis Of Patents As Ipo Signals Of Reputational Advantage," Working Paper Series in Economics and Institutions of Innovation 348, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0348
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    References listed on IDEAS

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    Keywords

    Patents; reputation signal; innovation; IPO; intellectual property;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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