The Effect of Financial Crisis on the Relation between Patent Applications and Firm Performance: The Case of Japan

Niyata Kawewong (), Piman Limpaphayom (), Pitima Diskulnetivitya and Yoshiyuki Matsuura ()
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Niyata Kawewong: Chiang Mai University Business School, Chiang Mai University, Chiang Mai, Thailand
Piman Limpaphayom: School of Business, Portland State University, Portland, USA
Pitima Diskulnetivitya: Chiang Mai University Business School, Chiang Mai University, Chiang Mai, Thailand
Yoshiyuki Matsuura: Graduate School of Innovation and Technology Management, Yamaguchi University, Yamaguchi, Japan

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2025, vol. 28, issue 02, 1-35

Abstract: Previous research has shown that a financial crisis can adversely affect corporate innovation, as measured by the number of patent applications. This study examines the relation between the number of patents filed and the operating performance and market valuation after the Global Financial Crisis in 2008. The results show that, consistent with previous studies, the number of patent applications in Japan drops drastically at the onset of the Global Financial Crisis. More importantly, the results also show that, even after the Global Financial Crisis, there is a positive relation between the number of patents filed and firm performance up to two years after the filing dates. In addition, the positive relation after the Global Financial Crisis is also much stronger than the one before the crisis. The findings are robust with respect to both operating and market performance. It is concluded that a financial crisis could potentially be beneficial if firms can adapt and shift the focus to the quality of innovation.

Keywords: Corporate innovation; firm value; global financial crisis; Japan; patent (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S0219091525500122

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