Innovation, Technology Standardization and the Value of the Firm

Antonin Bergeaud, Julia Schmidt and Riccardo Zago
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Antonin Bergeaud: HEC Paris - Economics & Decision Sciences
Julia Schmidt: HEC Paris - Economics & Decision Sciences
Riccardo Zago: Bank of France

No 1613, HEC Research Papers Series from HEC Paris

Abstract: Technology standards are defined by national and international organizations to select and disseminate the best technologies and practices. Using a measure of patent quality and a novel measure of the semantic proximity between patents and standards documents, this paper exploits the standardization process to disentangle the respective contributions of innovation and diffusion to firm value. Producing a patent increases a firm's book value by 0.8% over the first eight years following the patent grant. However, this value deteriorates when the patent is not incorporated into a standard and diffused. In contrast, only firms whose patent specifications are included in a standard experience an additional increase in firm value of about 0.4% thereafter. Similar results are obtained when examining firms' market-value and net worth. Finally, by studying firm-level productivity and markups, we show that the value gains associated with innovation stem from productivity improvements, whereas those associated with diffusion arise from rent extraction.

Keywords: firm-level productivity; rent extraction; semantic proximity (search for similar items in EconPapers)
JEL-codes: G30 O31 O33 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2026-01-20
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1613

DOI: 10.2139/ssrn.6100606

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