Entrepreneurship Theory and Practice 2026

Are All Patents Equal? How Patent Attributes Shape Market Reactions to Family and Nonfamily Firm Innovation

Kimberly Eddleston¹; Francesco Chirico^2,3; Pankaj C. Patel⁴

¹ Northeastern University, Boston, MA, USA · ² Macquarie University – Macquarie University Innovation, Strategy and Entrepreneurship (ISE) Research Centre, Sydney, NSW, Australia · ³ Jonkoping University – Centre for Family Entrepreneurship and Ownership (CeFEO), Sweden · ⁴ Villanova University, PA, USA

Abstract

Integrating family firm innovation research with signaling theory, we develop a framework explaining market reactions to patents granted to family versus nonfamily firms. Using a U.S. dataset of 52,241 patents from 2014 to 2018, we find the stock market reacts more positively to patents granted to family firms than nonfamily firms. We then examine reactions to radical versus incremental patents. Patents reflecting radical innovation, measured by novelty and pedigree, create greater market value for family firms than nonfamily firms, although the pedigree effect is only marginally significant. By contrast, patents reflecting incremental innovation, measured by temporal depth, have little effect on nonfamily firms’ market value but reduce family firms’ market value.

DOI

10.1177/10422587261470045

Language

en

Sources

openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓