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Market Value of Patents: Evidence from the US, 1976-2017

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  • Jihong Lee
  • Hyunkyeong Lim

Abstract

Since the 1980s, the US has experienced a surge in patenting and R&D. To better understand the phenomena, we explore the evolution of the mar- ket value of knowledge capital with a novel firm-level dataset. While the importance of R&D has steadily declined, the market value of patents made a large and sustained gain in the new millennium. An additional patent per million dollars of R&D improves firm value by 11% in the latest decade compared to 3% three decades ago. The increased patent rents are driven largely by young firms, suggesting a positive role of the US patent system.

Suggested Citation

  • Jihong Lee & Hyunkyeong Lim, 2019. "Market Value of Patents: Evidence from the US, 1976-2017," Working Paper Series no105, Institute of Economic Research, Seoul National University.
    • Handle: RePEc:snu:ioerwp:no105
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    More about this item

    Keywords

    Innovation; ?rm value; patent; R&D;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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