Technology Spillover Effects and Patent Announcements

Publication: Working/Discussion PaperWorking Paper/Preprint


Technological innovations create value for the innovating firm and spillover effects on peer firms. I show that patents lead to two opposing spillover effects: Around patent announcements, investors incorporate negative expectations into stock prices of close rivals to the innovating firm and positive expectations for peer firms that can learn from the patented technology. These expectations are consistent with the future growth rates of peer firms after the patent announcement. Negative spillover effects on close rivals have become less pronounced after 2000. I exploit industry differences and show that the American Inventors Protection Act of 1999 diminished the private patent value in affected industries and thus reduced spillovers on close product rivals. Moreover, the labor mobility of inventors shows that peer firms learn by hiring new inventors.
Original languageEnglish
Publication statusPublished - 2023


  • Patent announcements, knowledge effects, rivalry effects, inventor mobility

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