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Patent Value and Citations: Creative Destruction or Strategic Disruption?

Author

Listed:
  • David S. Abrams

    (Penn Law School & Wharton Business Economics & Public Policy Department, University of Pennsylvania,)

  • Ufuk Akcigit

    (Department of Economics, University of Pennsylvania & NBER)

  • Jillian Popadak

    (Wharton Business Economics & Public Policy Department, University of Pennsylvania)

Abstract

Prior work suggests that more valuable patents are cited more and this view has become standard in the empirical innovation literature. Using an NPE-derived dataset with patent-specific revenues we find that the relationship of citations to value in fact forms an inverted-U, with fewer citations at the high end of value than in the middle. Since the value of patents is concentrated in those at the high end, this is a challenge to both the empirical literature and the intuition behind it. We attempt to explain this relationship with a simple model of innovation, allowing for both productive and strategic patents. We find evidence of greater use of strategic patents where it would be most expected: among corporations, in fields of rapid development, in more recent patents and where divisional and continuation applications are employed. These findings have important implications for our basic understanding of growth, innovation, and intellectual property policy.

Suggested Citation

  • David S. Abrams & Ufuk Akcigit & Jillian Popadak, 2013. "Patent Value and Citations: Creative Destruction or Strategic Disruption?," PIER Working Paper Archive 13-065, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  • Handle: RePEc:pen:papers:13-065
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    References listed on IDEAS

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    More about this item

    Keywords

    productive innovation; defensive innovation; patents; creative destruction; citations; patent value; competition; intellectual property; entrepreneurship; strategic patenting; defensive patenting; patent thickets; fencing patents.;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • K1 - Law and Economics - - Basic Areas of Law

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