IPRIA Working Paper Series
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Intellectual Property Research Institute of Australia Working Paper No. 02/2002 When Does Start-Up Innovation Spur the Gale of Creative Destruction? by Joshua Gans, David H. Hsu and Scott Stern Date: July 2002 Abstract: This paper examines the determinants of commercialization strategy for start-up innovators. We examine whether the returns on innovation are earned through product market competition versus cooperation with established firms (through licensing, alliances or acquisition). Our hypotheses are that the relative returns to cooperation are increasing in (a) control over intellectual property rights, (b) low transaction costs and (c) sunk costs associated with product market entry. Using a novel dataset of the commercialization strategies of start-up innovators, our results suggest that the pro-competitive impact of start-up innovation – the gale of creative destruction – depends on imperfections in the market for ideas. Downloads: PDF [912K] |
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