This thesis consists of two studies that examine patent abandonment in an emerging market. Patent abandonment refers to firms’ disbandment of their ownership of the property right of a patent that it previously developed. Previous studies have largely drawn upon the economic models to explain why a patent is abandoned. Going beyond that, my thesis tries to incorporate both the organizational and inter-organizational perspectives to understand patent abandonment. In my first study, I build upon the organizational learning perspective to address the question of why the frequency of patent abandonment differs across firms. I highlight the role of firms’ capability of recognizing a high-value patent and the learning barriers to develop such a capability under the weak institutions i...[ Read more ]

This thesis consists of two studies that examine patent abandonment in an emerging market. Patent abandonment refers to firms’ disbandment of their ownership of the property right of a patent that it previously developed. Previous studies have largely drawn upon the economic models to explain why a patent is abandoned. Going beyond that, my thesis tries to incorporate both the organizational and inter-organizational perspectives to understand patent abandonment. In my first study, I build upon the organizational learning perspective to address the question of why the frequency of patent abandonment differs across firms. I highlight the role of firms’ capability of recognizing a high-value patent and the learning barriers to develop such a capability under the weak institutions in an emerging market. I propose, at first, firms may accumulate inaccurate knowledge about the value of a patent and thus develop more patents that are abandoned subsequently. Learning barriers explain a higher frequency of patent abandonment as firms accumulate more innovation experience in the early stage of learning. However, the effect of deliberate learning tends to outweigh the effect of learning barriers after a threshold level of innovation experience is attained. So, after reaching a threshold level, firms tend to have a lower frequency of patent abandonment with more innovation experience. In my second study, I turn to the inter-organizational perspectives and explain why firms tend to postpone their decision of patent abandonment. I argue that the hazard rate of a patent being abandoned does not increase monotonically with time. Such a hazard rate first increases but, after a time point, it decreases with time. It implies that firms may invest in resources specific to a patent and become committed to a patent over time. Further, firms are more likely to make investment in asset specificity and postpone their decision to abandon a patent in the technology field where there is an increasing rate of technology entry. Taken together, these two studies of my thesis contribute to understanding the phenomenon of patent abandonment.