The market value of patents and R&amp;D: Evidence from European firms

Hall, Bronwyn H.; Thoma, Grid; Torrisi, Salvatore

doi:10.3386/w13426

Cited by 162 publications

(120 citation statements)

References 29 publications

Supporting

Mentioning

111

Contrasting

Unclassified

Order By: Relevance

“…We follow the typical linear market value model applied by Hall et al . (), among others. The firm's assets enter additively, and hence we can write the estimable function under constant returns to scale σ = 1 as

\begin{matrix} M V_{i t} = q_{t}^{e} (1 + F_{i t}) {[γ_{R E} R E_{i t} + K_{i t} + true \sum_{I C} γ_{I C} R_{i t}^{I C}]}^{σ} \\ = q_{t}^{e} (1 + F_{i t}) K_{i t} (1 + γ_{R E} R E_{i t} / K_{i t} + \sum_{I C} γ_{I C} R_{i t}^{I C} / K_{i t}), \end{matrix}

where K it is physical capital,

R_{i t}^{I C}

is intangible capital of type IC, and F it is the share of employment abroad.…”

Section: Intangible Capital and Market Valuementioning

confidence: 94%

Intangible Investment and Market Valuation

Piekkola

2014

Review of Income and Wealth

View full text Add to dashboard Cite

This study derives performance‐ and expenditure‐based estimates of intangible capital and measures the extent to which intangible capital is captured by the equity market measures of firm value. Intangible capital is evaluated using occupational information available in the Finnish linked employer–employee data for the 1997–2011 period. The performance‐based organizational investment in value added is approximately 3 percent; R&D and ICT investment shares are lower, at 1.5 percent, and all are clustered in intangible‐intensive sectors that represent 40 percent of the private sector. Expenditure‐based organizational capital also exists in clusters other than that intensively investing in managerial and marketing effort, and performance‐based R&D capital is concentrated in the cluster with intensive R&D activity; both increase the market value of firms beyond the level that can be explained by standard economic analysis.

show abstract

\begin{matrix} M V_{i t} = q_{t}^{e} (1 + F_{i t}) {[γ_{R E} R E_{i t} + K_{i t} + true \sum_{I C} γ_{I C} R_{i t}^{I C}]}^{σ} \\ = q_{t}^{e} (1 + F_{i t}) K_{i t} (1 + γ_{R E} R E_{i t} / K_{i t} + \sum_{I C} γ_{I C} R_{i t}^{I C} / K_{i t}), \end{matrix}

where K it is physical capital,

R_{i t}^{I C}

is intangible capital of type IC, and F it is the share of employment abroad.…”

Section: Intangible Capital and Market Valuementioning

confidence: 94%

Intangible Investment and Market Valuation

Piekkola

2014

Review of Income and Wealth

View full text Add to dashboard Cite

show abstract

“…The more frequently a patent is cited by later patents, the higher is the spillover effect and hence the social value of the cited patent. In the literature, forward citations have frequently been used as a measure of patent quality or value, even though there is often skepticism about whether forward citations really measure patent value and / or spillover effects (Hall et al 2007). A patent can be cited any time after the application date, even after it has expired.…”

mentioning

confidence: 99%

Commercialization, renewal, and quality of patents

Svensson

2012

Economics of Innovation and New Technology

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Key words: Patents, renewal, commercialization, quality, commercialization modes, contract terms, survival models. Terms of use: Documents inJEL Classification: O31, O34, L24. AbstractOne of the major reasons why inventors are awarded patents by governments is they encourage R&D investments and commercialization of inventions. If the patent holder commercializes his invention, he has stronger incentives to retain the patent. The purpose here is to empirically analyze the relationship between commercialization and the renewal of patents. At the same time, I take into account defensive patent strategies (e.g. deterring competitors from utilizing the patent) and pointedly ask if there are any third factors (quality of the patent) that affect the commercialization and renewal decisions. Using a detailed database of Swedish patents, I utilize a survival model to estimate how commercialization influences the patent renewal decision. Basic results show commercialization and defensive strategies increase the probability a patent will be renewed, but also that quality influences commercialization and renewal decisions. When controlling for endogenous commercialization decision, there is still a strong positive relationship between commercialization and renewal of patents. Thus, given the quality of the patent, if the owner decides to commercialize the patent on the margin, this leads to longer survival of the patent. With regard to commercialization modes, there is some evidence licensed patents and patents commercialized in original and new firms -but not acquired patents -survive longer than noncommercialized patents. Looking more closely at the contracts of acquired and licensed patents, contracts with both variable and fixed fees -but not contracts with either variable or fixed fees -survive longer than non-commercialized patents. However, the analysis about modes and contract terms does not take into account the endogeneity problem.-----------------------------------

show abstract

“…Although there is a vast literature on the market value of innovation-related intangibles such as R&D or patents (Hall et al 2007), the studies on the value relevance of innovation capital in the biotechnology industry are scare and mostly limited to the American biotech firms. The objective of the paper is to fill this gap by conducting a theoretical analysis of the contribution of innovation-related intangibles to the firm's market value and to empirically verify this dependency.…”

Section: Resultsmentioning

confidence: 99%