Market Value and Patent Citations: A First Look
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TLDR
This article explored the economic meaning of citation-based patent measures using the financial market valuation of the firms that own the patents and found that citation-weighted patent stocks are more highly correlated with market value than patent stocks themselves and that this fact is due mainly to the high valuation placed on firms that hold very highly cited patents.Abstract:
As patent data become more available in machine-readable form, an increasing number of researchers have begun to use measures based on patents and their citations as indicators of technological output and information flow. This paper explores the economic meaning of these citation-based patent measures using the financial market valuation of the firms that own the patents. Using a new and comprehensive dataset containing over 4800 U. S. Manufacturing firms and their patenting activity for the past 30 years, we explore the contributions of R&D spending, patents, and citation-weighted patents to measures of Tobin's Q for the firms. We find that citation-weighted patent stocks are more highly correlated with market value than patent stocks themselves and that this fact is due mainly to the high valuation placed on firms that hold very highly cited patents. We also find that self-citations are worth about twice as much as ordinary citations, especially to smaller firms.read more
Citations
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The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools
Bronwyn H. Hall,Adam B. Jaffe,Adam B. Jaffe,Adam B. Jaffe,Manuel Trajtenberg,Manuel Trajtenberg,Manuel Trajtenberg +6 more
TL;DR: In particular, significant changes over time in the rate of patenting and in the number of citations made, as well as the inevitable truncation of the data, make it very hard to use the raw number of citation received by different patents directly in a meaningful way.
Report SeriesDOI
Competition and Innovation: an Inverted-U Relationship
TL;DR: In this article, the authors investigate the relationship between product market competition and innovation and find strong evidence of an inverted-U relationship using panel data, where competition discourages laggard firms from innovating but encourages neck-and-neck firms to innovate.
Journal ArticleDOI
Technology as a complex adaptive system: evidence from patent data
Lee Fleming,Olav Sorenson +1 more
TL;DR: In this paper, the authors developed a theory of invention by drawing on complex adaptive systems theory and showed that inventors might face a "complexity catastrophe" when they attempt to combine highly interdependent technologies.
Journal ArticleDOI
Learning-by-Hiring: When Is Mobility More Likely to Facilitate Interfirm Knowledge Transfer?
TL;DR: In this paper, the authors investigate the conditions under which learning-by-hiring (or the acquisition of knowledge through the hiring of experts from other firms) is more likely, and they study the patenting activities of engineers who moved from United States (U.S.) firms to non-US firms.
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Patents, Real Options and Firm Performance
Nicholas Bloom,John Van Reenen +1 more
TL;DR: In this paper, the authors analyzed the IFS-Leverhulme database on over 200 major British firms since 1968 and found that patents have an economically and statistically significant impact on firm-level productivity and market value.
References
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Market share, market value and innovation in a panel of British manufacturing firms
TL;DR: In this article, the empirical relationship between technological innovations, market share and stock market value was examined and new developments in the estimation of dynamic count data models were used to control for unobserved firm specific heterogeneity.
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Citation Frequency and the Value of Patented Innovation
TL;DR: In this article, economic value estimates were obtained on 962 inventions made in the United States and Germany and on which German patent renewal fees were paid to full-term expiration in 1995.
ReportDOI
Patents as Options: Some Estimates of the Value of Holding European Patent Stocks
TL;DR: In this paper, the authors used data on the proportion of patents renewed, and the renewal fees faced by, post World War II cohorts of patents in France, the United Kingdom, and Germany, in conjunction with a model of patent holders' renewal decisions, to estimate the returns earned from holding patents in these countries.
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The Impact of New Product Introductions on the Market Value of Firms
TL;DR: In this article, a financial market-based analysis of the impact of new product introductions on the market value of firms is presented, using traditional event-study methodology, and the authors provide a financial model for measuring the impact on firms.