Abstract
We explore the usefulness of patent citations as a measure of the "importance" of a firm's patents, as indicated by the stock market valuation of the firm's intangible stock of knowledge. Using patents and citations for 1963-1995, we estimate Tobin's q equations on the ratios of R&D to assets stocks, patents to R&D, and citations to patents. We find that each ratio significantly affects market value, with an extra citation per patent boosting market value by 3%. Further findings indicate that "unpredictable" citations have a stronger effect than the predictable portion, and that self-citations are more valuable than external citations.
| Original language | English |
|---|---|
| Pages (from-to) | 16-38 |
| Number of pages | 23 |
| Journal | RAND Journal of Economics |
| Volume | 36 |
| Issue number | 1 |
| State | Published - 2005 |