NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

What is a Patent Worth? Evidence from the U.S. Patent "Lottery"

Joan Farre-Mensa, Deepak Hegde, Alexander Ljungqvist

NBER Working Paper No. 23268
Issued in March 2017
NBER Program(s):Corporate Finance, Law and Economics, Productivity, Innovation, and Entrepreneurship

We provide evidence on the value of patents to startups by leveraging the random assignment of applications to examiners with different propensities to grant patents. Using unique data on all first-time applications filed at the U.S. Patent Office since 2001, we find that startups that win the patent “lottery” by drawing lenient examiners have, on average, 55% higher employment growth and 80% higher sales growth five years later. Patent winners also pursue more, and higher quality, follow-on innovation. Winning a first patent boosts a startup’s subsequent growth and innovation by facilitating access to funding from VCs, banks, and public investors.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

A non-technical summary of this paper is available in the May 2017 NBER digest.  You can sign up to receive the NBER Digest by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w23268

Users who downloaded this paper also downloaded* these:
Williams w23088 How Do Patents Affect Research Investments?
Budish, Roin, and Williams w21889 Patents and Research Investments: Assessing the Empirical Evidence
Bloom, Propper, Seiler, and Van Reenen w16032 The Impact of Competition on Management Quality: Evidence from Public Hospitals
Acemoglu and Restrepo w23285 Robots and Jobs: Evidence from US Labor Markets
Gentzkow, Kelly, and Taddy w23276 Text as Data
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us