Using patent citation patterns to infer innovation market competition |
| |
Authors: | Darshak PatelMichael R Ward |
| |
Institution: | a Department of Economics, 348E Gatton Business & Economics Building, University of Kentucky, Lexington, KY 40506-0034, United States b Department of Economics, 701 S. West Street, University of Texas at Arlington, Arlington, TX 76019, United States |
| |
Abstract: | We propose an empirical strategy to estimate competition in innovation markets. Our method relates firms’ market return on equity to information about patent citation patterns. Two innovations are implemented in the methodology. First is the application of daily abnormal stock returns rather than annual measures of Tobin's q. Second is the creation of citation patterns related to the area of science a firm patents in as represented by the detailed patent classification system. We find that markets positively reward firms when patents are granted. We further find that firm's market value increases when its patent portfolio is cited. We find evidence of competition in innovation markets. The market reacts at the time that the citation occurs and does not anticipate future citations at the time of patenting. Holding this effect constant, we find that citations from patents in the same area of science tend to reduce market value. We interpret these findings as consistent with more citations indicating more valuable intellectual property but citations from competing technologies decreasing it. |
| |
Keywords: | O31 L65 G12 |
本文献已被 ScienceDirect 等数据库收录! |
|