What Is a Patent Worth? Evidence from the U.S. Patent “Lottery”

We provide evidence on the value of patents to startups by leveraging the quasi-random assignment of applications to examiners with different propensities to grant patents. Using unique data on all first-time applications filed at the U.S. Patent Office since 2001, we find that startups that win the patent “lottery” by drawing lenient examiners have, on average, 55% higher employment growth and 80% higher sales growth five years later. Patent winners also pursue more, and higher quality, follow-on innovation. Winning a first patent boosts a startup’s subsequent growth and innovation by facilitating access to funding from venture capitalists, banks, and public investors.     

Trading Mechanisms and the Components of the Bid-Ask Spread

We compare the relative magnitudes of the components of the bid-ask spread for New York Stock Exchange (NYSE)/American Stock Exchange (AMEX) stocks to those of National Association of Securities Dealers Automated Quotations (NASDAQ)/National Market System (NMS) stocks. We find that the order-processing cost component is smaller, and the adverse selection component is greater on the NYSE/AMEX trading systems than on the NASDAQ/NMS system. The inventory holding component is also greater for exchange-traded stocks than for NASDAQ/NMS stocks, but this may be attributable to differences in the characteristics of the firms whose stocks trade on the respective systems.     

Institutional Diversity and Capitalist Transition: The Political Economy of Agrarian Change in Arunachal Pradesh, India

This paper contributes a preliminary analysis of the process of agrarian capitalist transition in Arunachal Pradesh, one of the least studied regions of India. Primarily based on information collected through a field survey in eleven villages, the paper seeks to explain the nature and implications of institutional unevenness in the development of capitalism. Institutional diversity is not simply mapped across space, it is also manifested in the simultaneous existence of market and non-market institutions across the means of production within the same village or spatial context. In addition, there is a continuous and complex interaction among these institutions which both shapes and is shaped by this capitalist transition. Primitive accumulation emerges as a continuing characteristic of the on-going agrarian and non-agrarian capitalist transition. Institutional adaptation, continuity and hybridity are as integral to the emergence of the market economy as are the processes of creation of new institutions and demise of others. There is no necessary correspondence between the emerging commercialization of the different productive dimensions of the agrarian economy. These uneven processes are deeply influenced by existing and emerging power relations and by the state. Framed by the Bernstein–Byres debate about the contemporary (ir)relevance of the agrarian question, evidence is presented to justify the conclusion that although the processes at work are far from the classical models of the transition to capitalism, all aspects of the agrarian question remain relevant.     

The Value of Embedded Real Options: Evidence from Consumer Automobile Lease Contracts

Under the common assumption of constant interest rates, we show that penalties for early termination of a lease are often structured in such a way that the cancellation option embedded in consumer automotive leases has little value. Furthermore, our estimates drawn from a sample of three popular car models over 1990 to 2000 indicate that the stand‐alone value of the lease‐end purchase option is, on average, about 16% of the market value of underlying used vehicles, or about $1,462 per contract. Finally, we examine the sensitivity of our option value estimates to model parameters and default risk.