Innovation activities and business cycles: are trademarks a leading indicator?

Editorial: why and when do firms trademark? Bridging perspectives from industrial organisation, innovation and entrepreneurship

“…Both entrepreneurship and innovation studies have suggested a strong link between trademarks and innovation. In startups trademarks often mark the start of a business (De Vries et al 2017). Research on trademarks in entrepreneurship has focused on the signalling function of trademarks to attract financial resources.…”

“…As startups suffer from liabilities of newness and smallness, they use trademarks as a means to attract resources. This motive to file trademarks relates to the signalling function of trademarks and targets different actors: VCs and other specialised investors in a very early phase for the case of innovative startups, all other investors in the R&D phase and customers and competitors in the commercialisation phase (Block et al 2014, Zhou et al 2016De Vries et al 2017). Block et al (2014) showed that the number and breadth of trademark applications have a positive effect on VCs' valuations of startups.…”

“…They may suffer from severe liabilities of newness (Gruber 2004) and hence may file a trademark as a way to signal their seriousness and professionalism towards external stakeholders (Block et al 2015a). When it comes to investors, De Vries et al (2017) found that VC involvement is an important driver of trademark filing and the building of brand assets (Forti, Munari, and Zhang 2019).…”

Dynamics of regional diversification: a new approach using trademark data

“…The elevated intensity of trademark filing behaviour is found in higher income countries but not in lower income countries where trademark intensity lags GDP. The growing empirical trademark literature points to a close yet ambiguous relationship between the rate of trademarking and GDP growth at the national level (Degrazia et al, 2019;Mangani, 2007a;Webster & Jensen, 2004). This introduces an important distinction: whether growth of trademarking primarily reflects the growing demand for high-quality products and services by consumers with greater spending power ('demand effect') or if it primarily reflects the growing variety of products and producers ('growth effect' or what we call the 'productivity effect').…”

“…This literature also points out important challenges associated with using trademark data to measure innovation and diversification processes, particularly those related to disentangling the close but ambiguous relationship between headline growth in trademarking and gross domestic product (GDP) (e.g., Degrazia et al, 2019;Webster & Jensen, 2004). The lessons from this step help us to adapt the lens of trademark data to better understand important dimensions of regional diversification processes.…”