How sensitive is the financial market to potential signals from the European patent grant procedure for American companies?

Niaz Kammoun (niazkammoun@gmail.com), Jean-Michel Sahut and Lubica Hikkerova
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Niaz Kammoun: IRG - Institut de Recherche en Gestion - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - Université Gustave Eiffel
Jean-Michel Sahut: IDRAC Business school Lyon - Institut pour le Développement et la Recherche d'Action Commerciale - Université de Lyon
Lubica Hikkerova: IPAG Business School

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Abstract: Signaling companies' value is a major issue as regards for new entrepreneurs and investors. Due to the large number and the diversity of developed inventions and innovations, we investigate the capacity of patents to promote key innovations and generate potential financial investment opportunities. Relying on a comprehensive dataset including detailed information of 142.669 European patents requested and held by US companies, we highlight financial market sensitivity to potential signals issued from granted patents during their life-cycle using event study methodology. Our research offers significant contributions to the existing debate and knowledge on the topic. The main contribution lies in the examination of relevant events occurring during the whole patent lifecycle as well as their impacts on financial valuation of holding companies. The methodological contribution consists in the use of event study methodology for intellectual assets. Lastly, managerial recommendations are proposed based on our results.

Keywords: Patents; event study; market reaction; abnormal return; signal; grant procedure (search for similar items in EconPapers)
Date: 2024-04-22
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Published in Management & Prospective, 2024, Volume 40 (3), pp.60-73. ⟨10.3917/g2000.403.0060⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04667979

DOI: 10.3917/g2000.403.0060

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