Scandinavian Working Papers in Economics
Working Paper Series,
Research Institute of Industrial Economics
No 799: Creative Destruction and Productive Preemption
Pehr-Johan Norbäck (), Lars Persson () and Roger Svensson ()
Additional contact information
Pehr-Johan Norbäck: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Lars Persson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Roger Svensson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Abstract: We develop a theory of commercialization mode (entry or sale) of entrepreneurial inventions into oligopoly, and show that an invention of higher quality is more likely to be sold (or licensed) to an incumbent due to strategic product market effects on the sales price. Moreover, preemptive acquisitions by incumbents are shown to stimulate the process of creative destruction by increasing the entrepreneurial effort allocated to high-quality invention projects. Using detailed data on patents granted to small firms and individuals, we find evidence that high-quality inventions are often sold, and that they are sold under bidding competition.
Keywords: Acquisitions; Entrepreneurship; Innovation; Start-ups; Patent; Ownership; Quality
JEL-codes: G24; L10; L20; M13; O30
33 pages, First version: June 10, 2009. Revised: September 12, 2014.
Full text files
wp799.pdf
Questions (including download problems) about the papers in this series should be directed to Elisabeth Gustafsson ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2024-02-05 17:12:19.