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Stock Market Reaction to Patent Value in Japan: an Event Study Analysis

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  • Nahoko Mitsuyama

    (Graduate School of Asia Pacific Studies, Waseda University)

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    Abstract

    The patent is regarded as an indicator of a firm’s innovativeness and many studies have tried to use it as a proxy for the same. However, little research focuses on the impact of the substantial value of patents on stock prices. This study employs event study analysis to explore the stock market reaction to the announcement of the “Patent Value Brand” by the Tokyo Stock Exchange and the “YK Value,” which is used to measure the economic value of a patent during the selection process. Our finding reveals little evidence for positive and significant stock price reactions to the brand announcement around the event day. In addition, the result is not altered in terms of cumulative abnormal returns over a longer term. We conclude that the stock market did not respond to the announcement of the Patent Value Brand and the substantial value of patents which is represented by the YK Value. Journal: Journal of Knowledge Management, Economics and Information Technology

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    Bibliographic Info

    Article provided by ScientificPapers.org in its journal Journal of Knowledge Management, Economics and Information Technology.

    Volume (Year): 3 (2013)
    Issue (Month): 6 (December)
    Pages: 12

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    Handle: RePEc:spp:jkmeit:1427

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    1. Harhoff, Dietmar & Scherer, Frederic M. & Vopel, Katrin, 2003. "Citations, family size, opposition and the value of patent rights," Research Policy, Elsevier, vol. 32(8), pages 1343-1363, September.
    2. Tor Jakob Klette & Zvi Griliches, 1997. "Empirical Patterns of Firm Growth and R&D Investment: A Quality Ladder Model Interpretation," Discussion Papers 188, Research Department of Statistics Norway.
    3. Sumner J. La Croix & Akihiko Kawaura, 1991. "Japan's Shift From Process to Product Patents in the Pharmaceutical Industry: An Event Study of the Impact on Japanese Firms," Working Papers 199118, University of Hawaii at Manoa, Department of Economics.
    4. Nicola Lacetera, 2001. "Corporate Governance and the Governance of Innovation: The Case of Pharmaceutical Industry," Journal of Management and Governance, Springer, vol. 5(1), pages 29-59, March.
    5. Bronwyn H. Hall & Dietmar Harhoff, 2012. "Recent Research on the Economics of Patents," NBER Working Papers 17773, National Bureau of Economic Research, Inc.
    6. Charles J. Corrado, 2011. "Event studies: A methodology review," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 51(1), pages 207-234, 03.
    7. Austin, David H, 1993. "An Event-Study Approach to Measuring Innovative Output: The Case of Biotechnology," American Economic Review, American Economic Association, vol. 83(2), pages 253-58, May.
    8. Cho, Myeong-Hyeon, 1998. "Ownership structure, investment, and the corporate value: an empirical analysis," Journal of Financial Economics, Elsevier, vol. 47(1), pages 103-121, January.
    9. Nahoko Mitsuyama & Satoshi Shimizutani, 2013. "Stock market response to women's active participation in Japan: an event study analysis on a disclosing policy," Economics Bulletin, AccessEcon, vol. 33(4), pages 2596-2606.
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