IDEAS home Printed from https://ideas.repec.org/a/spr/scient/v98y2014i2d10.1007_s11192-013-1110-9.html
   My bibliography  Save this article

Explore the new relationship between patents and market value: a panel smooth transition regression (PSTR) approach

Author

Listed:
  • Yu-Shan Chen

    (National Taipei University)

  • Chun-Yu Shih

    (National Yunlin University of Science & Technology)

  • Ching-Hsun Chang

    (Tamkang University)

Abstract

This paper is the first research applying the new approach, panel smooth transition regression (PSTR) model, in the field of patent analysis. This study uses PSTR model to verify whether there is a single threshold effect of Herfindahl–Hirschman Index of patents (HHI of patents) on the relationship between patents and market value in the American pharmaceutical industry. The results demonstrate that HHI of patents moderates the relationship between market value and patent performance, patent counts/assets and patent citations/assets. When HHI of patents is less than or equal to the threshold value, 0.3220, the positive relationship between patent performance and market value is lower. Once HHI of patents is more than the threshold value, 0.3220, the positive relationship between patent performance and market value is higher. This study points out that the second regime is optimal because the extent of the positive relationship between patent performance and market value is higher.

Suggested Citation

  • Yu-Shan Chen & Chun-Yu Shih & Ching-Hsun Chang, 2014. "Explore the new relationship between patents and market value: a panel smooth transition regression (PSTR) approach," Scientometrics, Springer;Akadémiai Kiadó, vol. 98(2), pages 1145-1159, February.
    • Handle: RePEc:spr:scient:v:98:y:2014:i:2:d:10.1007_s11192-013-1110-9
    DOI: 10.1007/s11192-013-1110-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11192-013-1110-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11192-013-1110-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yu-Shan Chen, 2011. "Using patent analysis to explore corporate growth," Scientometrics, Springer;Akadémiai Kiadó, vol. 88(2), pages 433-448, August.
    2. Hansen, Bruce E, 1996. "Inference When a Nuisance Parameter Is Not Identified under the Null Hypothesis," Econometrica, Econometric Society, vol. 64(2), pages 413-430, March.
    3. González, Andrés & Teräsvirta, Timo & van Dijk, Dick & Yang, Yukai, 2005. "Panel Smooth Transition Regression Models," SSE/EFI Working Paper Series in Economics and Finance 604, Stockholm School of Economics, revised 11 Oct 2017.
    4. Nagaoka, Sadao, 2005. "Determinants of high-royalty contracts and the impact of stronger protection of intellectual property rights in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 19(2), pages 233-254, June.
    5. Hansen, Bruce E., 1999. "Threshold effects in non-dynamic panels: Estimation, testing, and inference," Journal of Econometrics, Elsevier, vol. 93(2), pages 345-368, December.
    6. Mechtild Stock & Wolfgang G. Stock, 2006. "Intellectual property information: A comparative analysis of main information providers," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 57(13), pages 1794-1803, November.
    7. Duen-Ren Liu & Meng-Jung Shih, 2011. "Hybrid-patent classification based on patent-network analysis," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 62(2), pages 246-256, February.
    8. Yu-Shan Chen & Ke-Chiun Chang, 2009. "Using neural network to analyze the influence of the patent performance upon the market value of the US pharmaceutical companies," Scientometrics, Springer;Akadémiai Kiadó, vol. 80(3), pages 637-655, September.
    9. Manuel Trajtenberg, 1990. "A Penny for Your Quotes: Patent Citations and the Value of Innovations," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 172-187, Spring.
    10. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
    11. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    12. Emmanuel Duguet & Megan MacGarvie, 2005. "How well do patent citations measure flows of technology? Evidence from French innovation surveys," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(5), pages 375-393.
    13. Bronwyn H. Hall & Adam Jaffe & Manuel Trajtenberg, 2005. "Market Value and Patent Citations," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 16-38, Spring.
    14. Zvi Griliches, 1984. "Market Value, R&D, and Patents," NBER Chapters, in: R&D, Patents, and Productivity, pages 249-252, National Bureau of Economic Research, Inc.
    15. Rebecca Toppe Shortridge, 2004. "Market Valuation of Successful versus Non-successful R&D Efforts in the Pharmaceutical Industry," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 31(9-10), pages 1301-1325.
    16. Eggoh C. Jude, 2010. "Financial Development And Growth: A Panel Smooth Regression Approach," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 35(1), pages 15-33, March.
    17. Otto Toivanen & Paul Stoneman & Derek Bosworth, 2002. "Innovation and the Market Value of UK Firms, 1989–1995," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(1), pages 39-61, February.
    18. Dietmar Harhoff & Francis Narin & F. M. Scherer & Katrin Vopel, 1999. "Citation Frequency And The Value Of Patented Inventions," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 511-515, August.
    19. Fang Pei Su & Kuei Kuei Lai & R.R.K. Sharma & Tsung Hsien Kuo, 2009. "Patent priority network: Linking patent portfolio to strategic goals," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 60(11), pages 2353-2361, November.
    20. Yu-Shan Chen & Chun-Yu Shih, 2011. "Re-examine the relationship between patents and Tobin’s q," Scientometrics, Springer;Akadémiai Kiadó, vol. 89(3), pages 781-794, December.
    21. Hirschey, Mark & Richardson, Vernon J., 2004. "Are scientific indicators of patent quality useful to investors?," Journal of Empirical Finance, Elsevier, vol. 11(1), pages 91-107, January.
    22. Rebecca Toppe Shortridge, 2004. "Market Valuation of Successful versus Non‐successful R&D Efforts in the Pharmaceutical Industry," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 31(9‐10), pages 1301-1325, November.
    23. Yong-Gil Lee & Jeong-Dong Lee & Yong-Il Song & Se-Jun Lee, 2007. "An in-depth empirical analysis of patent citation counts using zero-inflated count data model: The case of KIST," Scientometrics, Springer;Akadémiai Kiadó, vol. 70(1), pages 27-39, January.
    24. Hirschey, Mark & Richardson, Vernon J., 2001. "Valuation effects of patent quality: A comparison for Japanese and U.S. firms," Pacific-Basin Finance Journal, Elsevier, vol. 9(1), pages 65-82, January.
    25. Loet Leydesdorff, 2008. "Patent classifications as indicators of intellectual organization," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 59(10), pages 1582-1597, August.
    26. Yu-Shan Chen & Ke-Chiun Chang, 2012. "Using the entropy-based patent measure to explore the influences of related and unrelated technological diversification upon technological competences and firm performance," Scientometrics, Springer;Akadémiai Kiadó, vol. 90(3), pages 825-841, March.
    27. Gilbert, Richard J & Newbery, David M G, 1982. "Preemptive Patenting and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 72(3), pages 514-526, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yujiao Li & Johan Håkansson & Oana Mihaescu & Niklas Rudholm, 2019. "Agglomeration economies in urban retailing: are there productivity spillovers when big-box retailers enter urban markets?," Applied Economics Letters, Taylor & Francis Journals, vol. 26(19), pages 1586-1589, November.
    2. Andres Gonzalez & Timo Terasvirta & Dick van Dijk, 2005. "Panel Smooth Transition Regression Models," Research Paper Series 165, Quantitative Finance Research Centre, University of Technology, Sydney.
    3. Po-Chin Wu & Shiao-Yen Liu & Ming-Fang Yang, 2017. "Nonlinear Exchange Rate Pass-Through: The Role of National Debt," Global Economic Review, Taylor & Francis Journals, vol. 46(1), pages 1-17, January.
    4. Wei, Wei & Zhang, Wan-Li & Wen, Jun & Wang, Jun-Sheng, 2020. "TFP growth in Chinese cities: The role of factor-intensity and industrial agglomeration," Economic Modelling, Elsevier, vol. 91(C), pages 534-549.
    5. Daquan Gao & Christina W. Y. Wong & Kee-hung Lai, 2023. "Development of Ecosystem for Corporate Green Innovation: Resource Dependency Theory Perspective," Sustainability, MDPI, vol. 15(6), pages 1-28, March.
    6. Kyriakos Drivas & Claire Economidou & Elena Ketteni & Konstantina Kottaridi, 2021. "Firms’ knowledge investment and market responses," Empirical Economics, Springer, vol. 61(5), pages 2363-2394, November.
    7. Yu-Shan Chen & Yu-Hsien Lin & Tai-Hsi Wu & Shu-Tzu Hung & Pei-Ju Lucy Ting & Chen-Han Hsieh, 2019. "Re-examine the determinants of market value from the perspectives of patent analysis and patent litigation," Scientometrics, Springer;Akadémiai Kiadó, vol. 120(1), pages 1-17, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yu-Shan Chen & Chun-Yu Shih, 2011. "Re-examine the relationship between patents and Tobin’s q," Scientometrics, Springer;Akadémiai Kiadó, vol. 89(3), pages 781-794, December.
    2. Yu-Shan Chen & Chun-Yu Shih & Ching-Hsun Chang, 2013. "Patents and market value in the U.S. pharmaceutical industry: new evidence from panel threshold regression," Scientometrics, Springer;Akadémiai Kiadó, vol. 97(2), pages 161-176, November.
    3. Yu-Shan Chen & Ke-Chiun Chang, 2009. "Using neural network to analyze the influence of the patent performance upon the market value of the US pharmaceutical companies," Scientometrics, Springer;Akadémiai Kiadó, vol. 80(3), pages 637-655, September.
    4. Federico Munari & Raffaele Oriani (ed.), 2011. "The Economic Valuation of Patents," Books, Edward Elgar Publishing, number 13561.
    5. Serena Morricone & Raffaele Oriani, 2011. "Stock Market Valuation of Patent Portfolios," Chapters, in: Federico Munari & Raffaele Oriani (ed.), The Economic Valuation of Patents, chapter 13, Edward Elgar Publishing.
    6. Maria Chiara Di Guardo & Kathryn Rudie Harrigan & Elona Marku, 2019. "M&A and diversification strategies: what effect on quality of inventive activity?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(3), pages 669-692, September.
    7. Kyriakos Drivas & Claire Economidou & Elena Ketteni & Konstantina Kottaridi, 2021. "Firms’ knowledge investment and market responses," Empirical Economics, Springer, vol. 61(5), pages 2363-2394, November.
    8. Nagaoka, Sadao & Motohashi, Kazuyuki & Goto, Akira, 2010. "Patent Statistics as an Innovation Indicator," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1083-1127, Elsevier.
    9. Manuel Acosta & Daniel Coronado & Esther Ferrándiz & Manuel Jiménez, 2022. "Effects of knowledge spillovers between competitors on patent quality: what patent citations reveal about a global duopoly," The Journal of Technology Transfer, Springer, vol. 47(5), pages 1451-1487, October.
    10. Dirk Czarnitzki & Katrin Hussinger & Bart Leten, 2020. "How Valuable are Patent Blocking Strategies?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(3), pages 409-434, May.
    11. Bart Leten & Rene Belderbos & Bart Van Looy, 2016. "Entry and Technological Performance in New Technology Domains: Technological Opportunities, Technology Competition and Technological Relatedness," Journal of Management Studies, Wiley Blackwell, vol. 53(8), pages 1257-1291, December.
    12. Adam B. Jaffe & Gaétan de Rassenfosse, 2017. "Patent citation data in social science research: Overview and best practices," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 68(6), pages 1360-1374, June.
    13. Sarah Kaplan & Keyvan Vakili, 2015. "The double-edged sword of recombination in breakthrough innovation," Strategic Management Journal, Wiley Blackwell, vol. 36(10), pages 1435-1457, October.
    14. Burak Dindaroglu, 2010. "Intra-Industry Knowledge Spillovers and Scientific Labor Mobility," Discussion Papers 10-01, University at Albany, SUNY, Department of Economics.
    15. Fernández, Ana María & Ferrándiz, Esther & Medina, Jennifer, 2022. "The diffusion of energy technologies. Evidence from renewable, fossil, and nuclear energy patents," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    16. Yu-Shan Chen & Yu-Hsien Lin & Tai-Hsi Wu & Shu-Tzu Hung & Pei-Ju Lucy Ting & Chen-Han Hsieh, 2019. "Re-examine the determinants of market value from the perspectives of patent analysis and patent litigation," Scientometrics, Springer;Akadémiai Kiadó, vol. 120(1), pages 1-17, July.
    17. Zhang, Sifei & Yuan, Chien-Chung & Chang, Ke-Chiun & Ken, Yun, 2012. "Exploring the nonlinear effects of patent H index, patent citations, and essential technological strength on corporate performance by using artificial neural network," Journal of Informetrics, Elsevier, vol. 6(4), pages 485-495.
    18. Lai, I-Chun & Su, Hsin-Ning, 2024. "Knowledge spectrum explored: Understanding source-recipient interactions and their influence on technology convergence," Technovation, Elsevier, vol. 133(C).
    19. Singh, Jasjit, 2008. "Distributed R&D, cross-regional knowledge integration and quality of innovative output," Research Policy, Elsevier, vol. 37(1), pages 77-96, February.
    20. Hur, Wonchang, 2024. "Entropy, heterogeneity, and their impact on technology progress," Journal of Informetrics, Elsevier, vol. 18(2).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:scient:v:98:y:2014:i:2:d:10.1007_s11192-013-1110-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.