Donald E. Bowen III

Ph.D. Candidate in Finance
Robert H. Smith School of Business
University of Maryland

Email: Donald (dot) Bowen (at) rhsmith (dot) umd (dot) edu

Vita (PDF)

SSRN page

Research Interests

Empirical Corporate Finance: Investment, Innovation, Entrepreneurship, Firm Boundaries

Working Papers

"Patent acquisition, investment, and contracting" (Job Market Paper) (SSRN link)
2016 Best Paper in Innovation and Entrepreneurship, Ed Snider Center for Entrepreneurship and Markets, University of Maryland
Numerous works have examined the finance-related implications of intellectual property that is generated internally or acquired through M&A activity. The transfer of intellectual property via the secondary market for patents has received less attention. This paper fills that gap by asking how patent acquisitions interact with firm investment policy. I find that patent acquirers subsequently invest in more R&D, increase internal patenting, and eventually make new investments in CAPX. Firms with more technological expertise and investment opportunities acquire more patents. Patent sales are the dominant type of contract and maximize investment incentives; patent licenses frequently contain royalties, which induce underinvestment problems. Nevertheless, licensing can be explained in part by financial and strategic considerations. Licensing is more likely when buyers become financially constrained, when revenue can be shifted to low tax sellers, and when the buyer is a competitor acquiring rights to a valuable patent. Overall, these results suggest patent acquisitions are motivated by the pursuit of investment synergies, rather than innovation substitution, commercialization motives, or legal threats.

"Were non-independent boards really captured before SOX?"
I exploit a loophole that allows firms to change the legal independence of their board without changing personnel to study the pre-SOX optimality of board structure. Within a diff-in-diff empirical strategy, I find that firms that avoided mandates to alter their boards outperformed firms forced to change their boards.


"What's your identification strategy? Innovation in corporate finance research" (SSRN link) (Official link)
with Laurent Fresard and Jerome Taillard
Management Science (Forthcoming)
Identification techniques entered finance in the 1990s (20 years after economics) and adoption was accelerated by training, colleagues, and researchers moving from economics to finance. Consistent with recent theories of technology diffusion, the adoption varies across researchers based on individuals’ expected net benefits of adoption.