Business, Management and Accounting
2 years ago

Low-tech firms outshine high-tech in IPO performance with patent signals.

The Asian Journal of Technology Management (AJTM)
Patent Signals of IPO Performance: Evidence from High- and Low-Tech Industries in Japan
Le Thuy Ngoc An, Yoshiyuki Matsuura, Norliza Che Yahya, Nguyen Huu Phuc

Paper Summary

Startups and established companies use patents to attract investors during their initial public offerings (IPOs). A study looked at 308 Japanese firms between 2000 and 2015 and found that having more patents before an IPO leads to better performance. Surprisingly, low-tech companies benefit more from patenting than high-tech ones, as they attract investors more easily with patents. This shows that patents can be a strong signal for IPO success, especially for low-tech industries.

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