| Abstract: |
This paper investigates firm dynamics in the period before, during, and after
an event consisting of a first published patent application. The analysis is
based on patent data from the Norwegian Industrial Property Office merged with
data from several business registers covering a period of almost 20 years. We
apply an event study design and use matching to control for confounding
factors. The first patent application by a young firm is associated with
significant growth in employment, output, assets and public research funding.
Moreover, our results indicate that economic activity starts to increase at
least three years ahead of the first patent application. However, we find no
evidence of additional firm growth after patent approval for successful
applicants. Our findings indicate that the existence of a properly functioning
patenting system supports innovation activities, especially early in the life
cycle of firms. |