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Patent Citations Indicating Present Value Of The Biotechnology Business

Author

Listed:
  • TUOMO NIKULAINEN

    (ETLA, the Research Institute of the Finnish Economy, Helsinki, Finland)

  • RAINE HERMANS

    (ETLA, the Research Institute of the Finnish Economy, Helsinki, Finland;
    Kellogg School of Management, Northwestern University, IL, USA)

  • MARTTI KULVIK

    (ETLA, the Research Institute of the Finnish Economy, Helsinki, Finland;
    Department of Neurology, HUCH Helsinki University Central Hospital, Helsinki, Finland)

Abstract

In this paper our aim is to assess the potential of using patent statistics in predicting the future sales anticipations and present value of a company active in the science-based industry. Instead of using conventional patent and patent application counts as indicators, we constructed patent citation weighted portfolios for each company. This way the heterogeneity of patents can be taken into account. Our data covers biotechnology patents held by Finnish biotechnology companies. Empirical results imply that particularly backward citations are related to present value estimations of the companies. In contrast to some previous studies, forward citations do not seem to predict the present value estimations. The findings provide some important implications on interpreting the significance of patent citations regarding valuation of science-based companies, and planning technology and innovation policies.

Suggested Citation

  • Tuomo Nikulainen & Raine Hermans & Martti Kulvik, 2008. "Patent Citations Indicating Present Value Of The Biotechnology Business," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 279-301.
    • Handle: RePEc:wsi:ijitmx:v:05:y:2008:i:03:n:s0219877008001436
    DOI: 10.1142/S0219877008001436
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    References listed on IDEAS

    as
    1. Hermans, Raine & Kulvik, Martti & Tahvanainen, Antti-Jussi, 2005. "ETLA 2004 Survey on the Finnish Biotechnology Industry," Discussion Papers 978, The Research Institute of the Finnish Economy.
    2. Nikulainen, Tuomo & Pajarinen, Mika & Palmberg, Christopher, 2005. "Patents and Technological Change - A Review with Focus on the FEPOCI Database," Discussion Papers 984, The Research Institute of the Finnish Economy.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Song, Haoyang & Hou, Jianhua & Zhang, Yang, 2023. "The measurements and determinants of patent technological value: Lifetime, strength, breadth, and dispersion from the technology diffusion perspective," Journal of Informetrics, Elsevier, vol. 17(1).
    2. Nikulainen, Tuomo & Tahvanainen, Antti-Jussi & Kulvik, Martti, 2012. "Expectations, Reality and Performance in the Finnish Biotechnology Business," Discussion Papers 1286, The Research Institute of the Finnish Economy.
    3. Fei Yuan & Kumiko Miyazaki, 2017. "Trajectory Identification as Proxies for Discerning the Dynamic Nature of Technological Change — The Case of Electric Vehicles Industry," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 14(01), pages 1-20, February.

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    More about this item

    Keywords

    Biotechnology; patent citations; patents; valuation; JEL Classification: O30; JEL Classification: M21; JEL Classification: L25;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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