Trade Marks and Market Value in UK Firms

Christine Greenhalgh and Mark Rogers

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: This paper uses a new data set of the trade mark activity of UK manufacturing and service sector firms (1996-2000) to investigate the market value of trade marks. Data on both trade (and service) marks sought via the UK Patent Office (UKTM) and the European Community Office for Harmonisation of the Internal Market (CTM) are available. Firms use trade marks to signal to consumers that the product is of a certain origin, implying consistent quality and reducing consumer search costs, thus increasing customer loyalty. The value of trade marks may vary across firms and industries, depending on such factors as whether or not patents can be filed and the market structure. Equally the costs of trade marks vary between UKTM and CTM applications, being higher for the latter. We analyse Tobin's q, the ratio of stock market value to the book value of tangible assets. We explore the impact of undertaking any trade mark activity and also the effects of increasing trade mark intensity among those who do. The results indicate that stock market values are positively associated with R&D and trade mark activity by firms. We find larger differences between firms with and without trade marks for services than for manufacturing. We also find bigger differences in Tobin's q when the services firm is applying for Community marks, rather than just applying for UK marks. Increasing the intensity of trade marks matters for both manufacturing and services, although at a decreasing marginal rate for manufacturing and only for the years excluding 2000 for services. The rapid fall in the UK stock market in 2000 appeared to negate the benefits of trade marks for innovative services firms.

Pages: 33 pages
Date: 2006-02
New Economics Papers: this item is included in nep-cse, nep-fmk, nep-int and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://melbourneinstitute.unimelb.edu.au/downloads ... series/wp2006n04.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2006n04

Access Statistics for this paper

More papers in Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Sheri Carnegie ().