Knowledge Creates Markets

Andrew Toole (USPTO), Dirk Czarnitzki, Katrin Hussinger, Paula Schliessler & Thorsten Doherr, “Knowledge Creates Markets: The Influence of Entrepreneurial Support and Patent Rights on Academic Entrepreneurship”

We use an exogenous change in German Federal law to examine how entrepreneurial support and the ownership of patent rights influence academic entrepreneurship. In 2002, the German Federal Government enacted a major reform called Knowledge Creates Markets that set up new infrastructure to facilitate university-industry technology transfer and transferred patent rights from university researchers to their universities. Based on a novel researcher-level panel database that includes a control group not affected by the IP policy change, we find no evidence that the new infrastructure resulted in an increase in start-up companies by university researchers. The transfer of patent rights may have strengthened the relationship between patents on university-discovered inventions and university start-ups; however, it substantially decreased the volume of patents with the largest decrease taking place in faculty-firm patenting relationships.