Essays on Innovation, Strategy and Competition

Abstract

This dissertation is composed of three essays on innovation, strategy and competition. The first essay studies how entry of patent intermediaries known as "patent assertion entities" (PAEs) impacts behavior of other firms in the patent space. It uses deaths of individual patent owners to exogenously identify PAE patent acquisitions, and estimates its impact on follow-on citations. Finally, it shows that after being acquired by PAEs, patents lose a large portion of their follow-on citations. These effects are driven almost entirely by citing behavior of large entities and are robust to controlling for patent examiner-added citations. This effect disappears once the acquired patents expire, indicating that large entities may be acting strategically to reduce the likelihood of patent assertion. The second essay investigates patent disclosure processes at seven large Standard-Setting Organizations (SSOs) where participating entities have a choice between specific patent disclosures and broad generic disclosures. It finds that large, downstream firms who face large technology search costs prefer to use generic patent disclosures. In addition, it shows that higher quality patents are more likely to be disclosed in specific disclosures, because they are more likely to be monetized through licensing. The third essay estimates the causal impact of research expenditures on scientific output. Unexpected college football outcomes provide exogenous variation to university funds, and in turn, research expenditures in the subsequent year.

Using this variation, this essay estimates the dollar elasticity of scholarly articles, new patent applications, and the citations that accrue to each.