Sleeping patents: any reason to wake up?

Patents are typically characterized as very valuable assets for firms. Nevertheless, there are many patents in a firm's portfolio that are actually never used. In this paper, we claim that there is a relationship between a firm's decision to use or not to use a patent and the characteristics of the underlying invention. We characterize patent use according to the sleeping or non-sleeping character of the patents in the firm's portfolio. We characterize the underlying invention along different dimensions captured by the patent, i.e. importance, strategic fit, scope and innovativeness. We perform an empirical analysis on a set of patent-active firms in the chemicals industry that trade some of their patents through what is currently the only website specialized in firm technology transfer through the Internet, yet2.com. We use The NBER Patent Citations Data File to obtain information about the patents granted to these firms. Our results suggest that sleeping patents are more innovative, broader and no less important than their counterparts. We conclude that such patents are worth waking up, especially when the underlying invention is applicable to business areas far away from the patentholder's strategic core. These results suggest that there is potential for markets for technology to develop.Patents; innovativeness;

Exit timing of venture capitalists in the course of an initial public offering

We analyze the desinvestment decision of venture capitalists in the course of an IPO of their portfolio firms. The capital market learns of the project quality only in the period following the IPO. Venture capitalists with high-quality firms face a trade-off between immediately selling their stake in the venture at a price below the true value and having to wait until the true value is revealed. We show that the dilemma may be resolved via a reputation-acquiring mechanism in a repeated game set-up. Thereby, we can explain, e.g., the advent of "hot-issue market behavior" involving early disinvestments and a high degree of price uncertainty. Furthermore, we provide a new rationale for underpricing. Young venture capitalists may use underpricing as a device for credibly committing themselves to acquiring reputation

Risk and the role of collateral in debt renegotiation

In his basic model of debt renegotiation, BESTER [1994] argues that collateral is more effective if high risk projects are financed. This result, however, crucially depends on the definition of risk. Using the second-order stochastic dominance criterion introduced by ROTHSCHILD AND STIGLITZ [1970], we show that it is not a project's high risk, induced by a high probability of default, that makes collateral more effective. Instead it turns out that, given the expected return, the probability of default has no impact on the collateral's effectiveness. Moreover, a higher risk of the project caused by a higher loss given default makes the use of collateral even less effective. --Debt renegotiation,Collateral,Risk,Stochastic dominance

Market Structure, Scale Efficiency, and Risk as Determinants of German Banking Profitability

The Scale-Efficiency version of the Efficient-Structure Hypothesis and the Structure-Conduct-Performance Hypothesis find empirical support in German banking data from 1998 to 2002. Due to the acceptance of the two hypotheses and the existence of overall economies of scale, we conclude that German banks may improve their profitability by increasing their asset size and/or by consolidation. The increased banking profitability will not only come from monopolistic power (higher concentration rate) but also from the scale efficiency benefit. We also find that portfolio risk is a key factor in determining the profit-structure relationship. --Profit-structure relationship,Market Structure,Scale efficiency,Portfolio Risk

Sub-field normaliztion in the multiplicative case : high- and low- impact citation indicators

This paper uses high- and low-impact citation indicators for the evaluation of the citation performance of research units at different aggregate levels. To solve the problem of the assignment of individual articles to multiple sub-fields, it follows a multiplicative strategy according to which each paper is wholly counted as many times as necessary in the several categories to which it is assigned at each aggregation level. To control for wide differences in citation practices at the lowest level of aggregation, we apply a novel sub-field normalization procedure in the multiplicative case. The methodology is applied to a partition of the world into three geographical areas: the U.S., the European Union (EU), and the Rest of the World. The main findings are the following two. (i) Although normalization does not systematically bias the results against any area, it reduces the U.S./EU highimpact gap in the all-sciences case by a non-negligible 14.4%. (ii) The dominance of the U.S. over the EU in the basic and applied research published in the periodical literature is almost universal at all aggregation levels. From the high-impact perspective, for example, the U.S. is ahead of the EU in 77 out of 80 disciplines, and all of 20 fields. For all sciences as a whole, the U.S. high-impact indicator is 61% greater than that of the EU. The authors acknowledge financial support from the Santander Universities Global Division of Banco Santander. Ruiz-Castillo also acknowledges financial help from the Spanish MEC through grant SEJ2007- 67436. This paper is part of the SCIFI-GLOW Collaborative Project supported by the European Commission.s Seventh Research Framework Programme, Contract number SSH7-CT-2008-217436 European Community's Seventh Framework Program.

Las colecciones históricas del Herbario BC (Instituto Botánico de Barcelona)

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