Market Value and Patent Citations: A First Look

Bronwyn H Hall, Adam B Jaffe, Manuel Trajtenberg

Research output: Working paper / PreprintWorking paper

Abstract

As patent data become more available in machine-readable form, an increasing number of researchers have begun to use measures based on patents and their citations as indicators of technological output and information flow. This paper explores the economic meaning of these citation-based patent measures using the financial market valuation of the firms that own the patents. Using a new and comprehensive dataset containing over 4800 U. S. Manufacturing firms and their patenting activity for the past 30 years, we explore the contributions of R&D spending, patents, and citation-weighted patents to measures of Tobin's Q for the firms. We find that citation-weighted patent stocks are more highly correlated with market value than patent stocks themselves and that this fact is due mainly to the high valuation placed on firms that hold very highly cited patents.
Original languageEnglish
Place of PublicationCambridge, Mass
PublisherNational Bureau of Economic Research
Number of pages64
DOIs
StatePublished - Jun 2000

Publication series

NameNBER working paper series
PublisherNational Bureau of Economic Research
No.7741

ULI Keywords

  • uli

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