Firm market valuation and intellectual property assets

Abstract

This paper investigates the relationship between the innovative activity of the top corporate R&D investors worldwide and their market valuation. The analysis exploits a sample of more than 1,250 publicly listed Multinational Corporations (MNCs) and their intellectual property rights (IPR)patents and trademarks -filed between 2005 and 2012. The study contributes to the literature on the IPRmarket value link by examining the premium resulting from the interactive use of different IPR. Moreover, the empirical setting allows differentiating the effects of an increase in market value derived from additional IPR (within-effects) with respect to the premium received for holding more IPR than the competitors (between-effects). The findings suggest that investors value the simultaneous use of the two IPRs and form their expectations by benchmarking firms. Finally, significant industrial specificities are observed in the individual effects of patents, trademarks and their interactions on the market value of firms.

Editorial: why and when do firms trademark? Bridging perspectives from industrial organisation, innovation and entrepreneurship

“…Relatedly, a key motive for firms to file and maintain trademark portfolios is that they represent assets (Castaldi 2019), with a clear impact on firm market value and profitability (Schautschick and Greenhalgh 2016). Trademark assets often complement technological assets Block 2011, Grazzi, Piccardo, andVergari 2019;Dosso and Vezzani 2017).…”

Concordance and Complementarity in Intellectual Property Instruments

“…1 The AIDA dataset, due to its nature, covers virtually the universe of Italian limited liability firms independently of their size or age, thus representing an ideal set of data to study the dynamics of firms and industries. This is a noteworthy feature with respect to many previous works (see Fang et al (2011), Chang et al (2012), Dernis et al (2015), Daiko et al (2017) and Dosso and Vezzani (2017), among others) that, due to data constraints, could only focus on top corporate R&D investors or on firms operating in high-tech industries. The time period covered by our empirical analysis spans from 2006 to 2014 and we focus only on manufacturing firms.…”

“…Our contribution is threefold. First, differently from most of empirical works, which focus on large and medium firms, on top corporate R&D investors or on firms operating in high-tech industries (see e.g., Greenhalgh and Rogers, 2006;Fang et al, 2011;Chang et al, 2012;Greenhalgh and Rogers, 2012;Dernis et al, 2015;Daiko et al, 2017;Dosso and Vezzani, 2017;Castaldi and Dosso, 2018), we have performed our analysis on IP taking into account the virtual universe of Italian limited liability manufacturing firms. Second, we have investigated whether there is a complementary or substitute relationship between the two instruments of IP.…”

“…Second, we have investigated whether there is a complementary or substitute relationship between the two instruments of IP. To the best of our knowledge, only few studies examine combined impacts of patents and trademarks on firms' performance (see e.g., Greenhalgh and Rogers, 2012;Sandner and Block, 2011;Dosso and Vezzani, 2017;Llerena and Millot, 2013;Jensen et al, 2008;Buddelmeyer et al, 2010;Helmers and Rogers, 2010;Wagner and Cockburn, 2010). Finally and completely novel, for firms owning both IP instruments, we have proposed a measure of concordance between a firm's stock of patents and trademarks, investigating the effect of this concordance on firms' performance.…”

“…firms' performance which differ across sectors. For example, Llerena and Millot (2013) identify a positive combined effects of patents and trademarks on the market value only for French firms operating in chemical and pharmaceutical industries (they find a negative combined effect for firms operating in high-tech sectors), while Dosso and Vezzani (2017) show that having both patents and trademarks implies higher firms' market value only for the automobile sector. As far as the comparison between the two instruments is concerned, our estimates suggest that firms owning only trademarks show higher performance than firms with only patents.…”