Project description
Attracting capital to commercialize innovative ideas can be a daunting task. Investors often find it difficult to see whether the value of a new technology is actually what the inventor claims. Thus, investors usually prefer to invest in established and well-known companies. Attempts to overcome the liquidity constraints of innovative "start-up" companies often fail, such as for instance most recently the "New Market" of the German stock exchange in the late 1990s.The financing of innovation through the sale of equity on a stock market, however is by no means a novel development of the late 20th century. We can show that many innovative German companies went public at the Berlin stock exchange and on regional exchanges to finance innovation during Germany industrial takeoff. By applying for patents, the start-up companies were able to signal their ability to innovate and thus attract more investors.
Another part of the project deals with the question of how a state can support innovations. Württemberg for instance seem to have supported local investors by discriminating foreign patents: In the second half of the 19th century, Württemberg became one of the more industrialized German states and developed into one of the most innovative German regions. The Württemberg patent law gave all citizens of the other Zollverein states the same rights as the local inventors. Formal rules, however, can be misleading. The Wuerttemberg patent practice systematically discriminated against non-Wuerttembergers and allowed the natives to more quickly imitate advanced foreign technologies. The success of the Swabian inventor and his achievement for the industrialization of Wuerttemberg can thus be seen as a result of a systematic discrimination of local inventors.
Involved Researchers
Sibylle Lehmann-Hasemeyer (sibylle.lehmann@uni-hohenheim.de)
Andreas Neumayer (andreas.neumayer@uni-hohenheim.de)
Jochen Streb (Universität Mannheim)
Project-related Publications