Abstract
Prior research shows that trademarks positively relate to startups' growth and survival. However, empirical evidence on the impact of intellectual property rights (IPRs), especially trademarks, on the development of social startups' hybrid outcomes is limited. Our study aims to fill this gap by investigating how early trademarking relates to the sustainability and economic outcomes of social startups. Based on a sample of 485 social startups from Germany, we find that social startups that register a trademark within the first three years of their existence have both significantly higher sustainability and economic outcomes. Additionally, we identify that the geographical scope of a trademark relates differently to social startups' outcomes. Our results contribute to the emerging literature on startups’ role to achieve sustainability outcomes and to IPR research that lacks an understanding of the importance of trademarks for sustainable entrepreneurship. We provide several practical implications for social startups, impact investors, and policy-makers.
| Original language | English |
|---|---|
| Article number | 134320 |
| Journal | Journal of Cleaner Production |
| Volume | 376 |
| DOIs | |
| Publication status | Published - 20 Nov 2022 |
Bibliographical note
Funding Information:Concerning the economic outcomes of social startups, prior studies document that external funding and formal business planning are of major importance (e.g., Cacciolatti et al., 2020; Lall and Park, 2020; Staessens et al., 2019). While different studies show that external funding predicts economic outcomes (Cacciolatti et al., 2020; Lall and Park, 2020), Cheah et al. (2019a) highlight that external resources are more successful for social startups if they are provided together with common business training. Furthermore, Cacciolatti et al. (2020) show that the economic outcomes of social startups are predicted differently for different types of external funding. For example, equity investments have a positive influence on credit ratings but weaken the profitability of social startups. In terms of revenue development as an economic outcome, Neumann (2021) shows that the substantial greening strategies of startups increase their turnover performance.First, registered trademarks provide startups with protection value. Since trademarks are registered when innovations, in the form of products or services, are on the verge of commercialization, the protection value of trademarks enables startups to appropriate returns from innovations (Hsu et al., 2021; Malmberg, 2005). Thus, trademarks have been shown to predict, for example, the profitability or stock returns of firms (Hsu et al., 2021; Sandner and Block, 2011). According to the U.S. National Science Foundation's Business R&D and Innovation Survey (NSF BRDIS), the protection value of trademarks can make them even more important than patents, particularly in low-patenting industries. Since the field of social entrepreneurship is part of the low-patenting industry, trademarks might be of great importance for social startups. Furthermore, trademarks support firms in protecting their whole brands, which in turn enables them to improve customer loyalty and willingness to pay for their offers (e.g., Wood, 2000).
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