Innovation, Appropriability, And The Underpricing Of Initial Public Offerings

Heeley, Michael B.; Matusik, Sharon F.; Jain, Neelam

doi:10.5465/amj.2007.24162388

“…Taking all those arguments together, our first hypothesis reads: Furthermore, it is sensible to distinguish between the size of the technology portfolio to be acquired and its quality. In the first place, a patent acts as a positive signal as it shows that the prospective target firm has proven its technological expertise and capabilities and that it has a well-functioning laboratory and inventor team (Ndofor and Levitas, 2004;Levitas and McFadyen, 2006;Heeley et al, 2007). This holds also for acquiring firms that lack technological background or that engage in an acquisition in order to enter a new technology line.…”

Section: Technological Relatedness Content and The Value Of Technologymentioning

confidence: 99%

“…An alternative theoretical perspective on the ability of an acquiring firm to judge the value of externally available technologies has emerged from the literature on information asymmetries in investment decisions (e.g., Aboody and Lev, 2000;Cohen and Dean, 2005;Heeley et al, 2007). Generally speaking, acquirers face the challenge of evaluating the innovation activities of a potential target in the absence of detailed information on every single innovation project.…”

Section: Technological Relatedness Content and The Value Of Technologymentioning

confidence: 99%

“…Each innovation project is characterized by its own specific attributes which are generally kept secret by a firm to appropriate the returns from innovation. In addition to their in-house expertise, acquirers may use publicly available information sources like patent data to assess the value of a firm's innovation activities (Heeley et al, 2007). In order for a patent to be granted, the technological content of the patent needs to be disclosed by the applicant to the patent office.…”

Section: Technological Relatedness Content and The Value Of Technologymentioning

confidence: 99%

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Market and technology access through firm acquisitions: Beyond one size fits all

Grimpe¹,

Hussinger²

2008

Progress in International Business Research

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp08037.pdf larger targets may provide better access to markets and established products as these firms typically also have a higher market share and a better distribution network. Non-technical summaryLarger acquisitions should hence also tend to be cross-border rather than domestic.Given this heterogeneity of takeover motivations and the skewness of the distribution of the deal value we investigate whether standard estimation procedures that focus on the average acquisition target in order to unveil the underlying takeover motivation show the complete picture. AbstractFirm acquisitions have been shown to serve as a way to gain access to international markets, technological assets, products or other valuable resources of the target firm.Given this heterogeneity of takeover motivations and the skewness of the distribution of the deal value we show whether and how the importance of different takeover motivations changes along the deal value distribution. Based on a comprehensive

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“…Complex technologies, on the contrary, are characterized by a less transparent link between patenting and value appropriation as it is unclear whether it will be feasible to defend the IPR itself because of interdependent technologies (Levin et al, 1987;Heeley et al, 2007). As a result, in-and out-licensing should be of minor importance in case of discrete technologies.…”

Section: Literature Backgroundmentioning

confidence: 99%

“…In this regard, blocking patents can be used to hinder competitors from developing a competing alternative technology (Heeley et al, 2007) or to remove existing patent fences. In fact, von find for the U.S. semiconductor industry that a firm's patenting activity increases with the density of patent thickets threatening to block its patent applications.…”

Section: Literature Backgroundmentioning

confidence: 99%

Inventions Under Siege? The Impact of Technology Competition on Licensing

Grimpe

¹

,

Hussinger

²

2011

AMPROC

0

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp09039.pdf Non-technical summaryIn recent years, the view on patents as an instrument for firms to appropriate the returns from inventive activities has shifted towards a more explicit consideration of a patent's strategic In this paper, we argue that firms facing a high chance of being blocked by technology competitors engage both in in-and out-licensing of technology. This suggests that the blocking threat favors investment in patent licenses rather than in pure in-house research and development (R&D) for some firms while it increases licensing revenues of firms owning blocking patents. The relationship should be particularly pronounced in complex technologies as these exhibit a higher density of patent thickets compared to discrete technologies. We construct a novel measure that captures the threat of being blocked if a firm files an average patent application conditional on its technology portfolio.Based on a comprehensive dataset of more than 400 manufacturing firms from Germany, our results largely confirm the research hypotheses. Distinguishing the effect of the blocking threat for firms in discrete and complex industries (i.e., product technologies characterized as complex contain a large number of patentable elements while product technologies characterized as discrete consist of relatively few patentable elements), we find that the likelihood of being blocked only affects the licensing activities of firms in complex industries, while there is no effect of blocking on licensing for firms operating in discrete industries. This result is in line with the argument that licensing can mitigate hold-up problems in technology markets. In addition, we take account of the potential feedback effects of licensing on internal R&D investments of the firm and find that these are endogenous. Das Wichtigste in KürzeIn den vergangenen Jahren sind Patente zunehmend aufgrund ihrer strategischen Bedeutung AbstractIn recent years, firms have increasingly contributed to and been confronted with a patent landscape characterized by numerous but marginal inventions, overlapping claims and patent fences. Literature suggests that both the fragmentation of ownership and the threat of a firm's patent applications being blocked by competitors' patents lead to increased patenting and inlicensing activity. In this paper, we investigate the effect of expected blocking on firms' engagement in in-and...

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Internal Commitment or External Collaboration? The Impact of Human Resource Management Systems on Firm Innovation and Performance

Zhou

¹

,

Hong

²

,

Liu

³

2013

Human Resource Management

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Complementing previous research that showed a positive effect of general human resource management (HRM) systems on general fi rm performance, this article undertakes an integrative approach to compare the main effects and examine the interaction effects of two particular HRM systems on infl uencing fi rm innovation and performance. Using data from 179 organizations in China, we found that both the commitment-oriented system, which emphasized internal cohesiveness, and the collaboration-oriented system, which was intended to build external connections, contributed to fi rm innovation and, subsequently, bottom-line performance. We also found an attenuated interaction between the two HRM systems in predicting fi rm innovation. We employed a mediated-moderation path model to extricate the relationships. Results suggested that organizations that implemented both HRM systems to promote innovation might face ambidexterity challenges. Ideas for future research and practical implications are discussed.

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Innovation, Appropriability, And The Underpricing Of Initial Public Offerings

Cited by 219 publications

References 37 publications

Market and technology access through firm acquisitions: Beyond one size fits all

Market and technology access through firm acquisitions: Beyond one size fits all

Inventions Under Siege? The Impact of Technology Competition on Licensing

Internal Commitment or External Collaboration? The Impact of Human Resource Management Systems on Firm Innovation and Performance

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