Bronwyn H. Hall (University of California at Berkeley, University of Maastricht, NBER, and IFS London.) Grid Thoma (University of Camerino and CESPRI Bocconi University, Milano, Italy.) Salvatore Torrisi (Bologna University and CESPRI Bocconi University, Milan, Italy.)
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This paper provides novel empirical evidence on the private value of patents and R&D. We analyze an unbalanced sample of firms from five EU countries - France, Germany, Switzerland, Sweden and the UK in the period 1985-2005. We explore the relationship between firm’s stock market value and patents, accounting for the ‘quality’ of EPO patents. We find that Tobin’s q is positively and significantly associated with R&D and patent stocks. In contrast to results for the U.S., forward citations do not add information beyond that in patents. However, the composite quality indicator based on backward citations, forward citations and the number of technical fields covered by the patent is informative for value. Software patents account for a rising share of total patents in the EPO. Moreover, some scholars of innovation and intellectual property rights argue that software and business methods patents on average are of poor quality and that these patents are applied for merely to build portfolios rather than for protection of real inventions. We therefore tested for the impact of software patents on the market value of the firm and did not find any significant effect, in contrast to results for the United States. However, in Europe, such patents are highly concentrated, with 90 per cent of the software patents in our sample held by just 15 of the firms.
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Paper provided by CESPRI, Centre for Research on Innovation and Internationalisation, Universita' Bocconi, Milano, Italy in its series CESPRI Working Papers with number
186.
Length: pages 43 Date of creation: Nov 2006 Date of revision:
Nov 2006 Handle: RePEc:cri:cespri:wp186
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Zvi Griliches, 1984.
"Market Value, R&D, and Patents,"
NBER Chapters,
in: R & D, Patents, and Productivity, pages 249-252
National Bureau of Economic Research, Inc.
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Fabio Montobbio & E. Bacchiocchi, 2004.
"EPO vs. USPTO Citation Lags,"
CESPRI Working Papers
161, CESPRI, Centre for Research on Innovation and Internationalisation, Universita' Bocconi, Milano, Italy, revised Sep 2004.
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