Market Value and Patent Citations: A First Look

Bronwyn Hall, Adam Jaffe and Manuel Trajtenberg

Department of Economics, Working Paper Series from Department of Economics, Institute for Business and Economic Research, UC Berkeley

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. We also find that self-citations are worth about twice as much as ordinary citations, especially to smaller firms.

Keywords: market value; patent citations; bibliometrics; innovation (search for similar items in EconPapers)
Date: 2001-08-02
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Citations: View citations in EconPapers (51)

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Related works:
Working Paper: Market Value and Patent Citations: A First Look (2002)
Working Paper: Market Value and Patent Citations: A First Look (2001)
Working Paper: Market Value and Patent Citations: A First Look (2001)
Working Paper: Market Value and Patent Citations: A First Look (2000)
Working Paper: Market Value and Patent Citations: A First Look (2000)
Working Paper: Market Value and Patent Citations: A First Look (2000)
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