Creative destruction and productive preemption

Arbeitspapier

We develop a theory of innovation for entry and sale into oligopoly, and show that inventions of higher quality are more likely to be sold (or licensed) to an incumbent due to strategic product market effects on the sales price. Such 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 data on patents granted to small firms and individuals, we find evidence that high-quality inventions are sold under preemptive bidding competition. Asymmetric information problems are shown to be solved by verification through entry for sale.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 4075

Classification and Topics

• Classification: Wirtschaft ; Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies ; Market Structure, Firm Strategy, and Market Performance: General ; Firm Objectives, Organization, and Behavior: General ; New Firms; Startups ; Innovation; Research and Development; Technological Change; Intellectual Property Rights: General
• Subject: acquisitions ; entrepreneurship ; innovation ; start-ups ; patent ; ownership ; quality ; Innovation ; Patent ; Unternehmensgründung ; Kommerzialisierung ; Schumpeterismus ; Übernahme ; Probit-Modell ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Norbäck, Pehr-Johan ; Persson, Lars ; Svensson, Roger
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/69551
• Last update: 10.03.2025, 11:44 AM CET