Table of contents(12 chapters)
We examine the influence of venture capital on patented inventions in the United States across twenty industries over three decades. We address concerns about causality in several ways, including exploiting a 1979 policy shift that spurred venture capital fundraising. We find that increases in venture capital activity in an industry are associated with significantly higher patenting rates. While the ratio of venture capital to R&D averaged less than 3% from 1983–1992, our estimates suggest that venture capital may have accounted for 8% of industrial innovations in that period.
Stock volatility has raised some serious questions about the way some investors ascertain the true value of the quality of a venture proposition. Prior signaling theory argues that the amount of personal wealth offered by individual entrepreneurs as initial equity in a new venture, is a fitting indicator of the proposed project's quality. However, it has typically been focused only on the absolute amount of the initial capital invested by the entrepreneur, while this manuscript arguably demonstrates that a more appropriate signal is the actual proportion, since it signifies both the project's value and the entrepreneur's commitment to the project.
Due to conflicts of interest between the agent that controls the funds of the firm (the entrepreneur) and the agent that provides the funds (the investor), external financing is limited. The limited availability of external financing creates an incentive for entrepreneurs to increase the internal funds with higher savings. Using data from the Panel Study of Income Dynamics, this chapter shows that entrepreneurs have higher saving rates than workers and experience greater upward mobility. Given these results, policies promoting entrepreneurship — especially those providing financial resources to households located at the lower end of the distribution of wealth — are important for fostering socio-economic mobility.
Persistent commentary contends that the Patent Office is issuing patents that appropriate public domain concepts at an alarming frequency. This article describes the forces that have rendered the Patent Office an increasingly porous agency. It next reviews existing proposals for improving patent quality, including the conventional wisdom that an opposition system would contribute meaningfully to the solution of our patent quality problem. This article instead proposes that the Patent Office recruit members of the public to act as private patent examiners. By awarding informants with a bounty assessed against applicants, the Patent Office can reduce the social costs of the patent system.
During the 1980s, changes in the U.S. legal environment ushered in an era characterized by strong patent rights. This paper examines the effects of this “pro-patent” shift on firms in the semiconductor industry. By conducting interviews with industry representatives and analyzing the patenting behavior of 95 U.S. semiconductor firms during 1979–1995, we find that the strengthening of U.S. patent rights spawned “patent portfolio races” among capital-intensive firms, but also may have facilitated entry by specialized design firms during this period. The results highlight the multifaceted effects of strengthening patent rights on firms within one important cumulative technological setting.
This chapter summarizes findings from case studies of university-based start-up firms. Case studies were used to contribute descriptive accounts and a set of discussion points to this emerging area of research. The case studies contribute several important insights on the invention-innovation process, focusing on the role of public institutions — such as university research labs and federal funding programs — and the interaction between public and private interests. In addition, these case studies highlight the importance of the inventor's personal (tacit) knowledge in developing the technology.
This manuscript provides an overview of the recent trends in business ownership and performance of firms owned by minorities and females in the United States. A review of the literature is provided from the perspective of the four major streams of research on minority and female entrepreneurs and their ventures: economic, business management, psychological and sociological. The review culminates with a synthesis of findings for both minorities and females. An integrating model is presented and results of a survey examining select components of the model are presented. Directions for future research are discussed.
In the context of 20th century economics, the invisible hand might be viewed as leading an economy toward an efficient equilibrium allocation of resources. In contrast, Adam Smith's idea was that the invisible hand led people to act entrepreneurially, to explore ways to allocate their resources to increase productivity. Current 21st century economic policy depicts economic progress as income growth, whereas the more fundamental characteristic of economic progress is that it generates new types of goods and services and discovers ways of producing more efficiently. After examining these concepts, this paper discusses policies that can lead to increased economic progress.
We explore how a cost-minimizing buyer innovates through the use of both a mix of transaction modes — contracts and spot markets — to secure a single input, given endogenous choice of upstream investments. We broadly define innovation as the internal structuring of how a firm purchases its inputs given it has the option of making innovative upstream investments that affect both the contract vendor's costs and the buyer's reservation spot market price within a risky external environment. The model examines the use of transaction-specific upstream investments that reduces the input vendor's costs, truncates the distribution of spot market prices and allows the buyer to take advantage of the synergy between the two modes.
- Publication date
- Book series
- Advances in the Study of Entrepreneurship, Innovation and Economic Growth
- Series copyright holder
- Emerald Publishing Limited
- Book series ISSN