Patent quality, firm value, and investor underreaction: Evidence from patent examiner busyness

Tao Shu, Xuan Tian and Xintong Zhan

Journal of Financial Economics, 2022, vol. 143, issue 3, 1043-1069

Abstract: This paper attempts to study the causal effect of examiner busyness on patent quality and firm value. Using a broad set of patent quality measures, we find strong evidence that patents allowed by busy examiners exhibit significantly lower quality. Further, examiner busyness of firms’ patents negatively predicts the firms’ future stock returns, which is consistent with investor underreaction to examiner busyness. Examiners’ experience helps attenuate the negative effect of examiner busyness.

Keywords: Patent quality; Examiner busyness; Stock returns; Investor underreaction (search for similar items in EconPapers)
JEL-codes: G14 G32 G41 O31 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:143:y:2022:i:3:p:1043-1069

DOI: 10.1016/j.jfineco.2021.10.013

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