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Appropriation Of Returns From Technological Assets And The Values Of Patents And R&D In Japanese High-Tech Firms

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  • Shoko Haneda
  • Hiroyuki Odagiri

Abstract

This paper investigates the extent that technological assets contribute to the value of the firm, using the sample of 90 Japanese firms in pharmaceutical, chemical, and electrical equipment industries. We use the firm's R&D expenditures and the number of patents (in stock) as the measures of its technological assets and show that the relative usefulness of these two measures varies across industries. Particularly, Tobin's q is positively related to the technological assets most strongly in the pharmaceutical industry. It is also most sensitive in this industry to the level of patent stock, coinciding with the view that drug patents are more effective than other patents as a means of appropriating returns from innovation. The communications equipment industry is also characterized by its q's dependence on patent stock. In addition, this industry's q is particularly sensitive to the level of net R&D investment in the most recent year, presumably because of the rapid technological progress in this industry.

Suggested Citation

  • Shoko Haneda & Hiroyuki Odagiri, 1998. "Appropriation Of Returns From Technological Assets And The Values Of Patents And R&D In Japanese High-Tech Firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(4), pages 303-321.
    • Handle: RePEc:taf:ecinnt:v:7:y:1998:i:4:p:303-321
    DOI: 10.1080/10438599800000038
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    References listed on IDEAS

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    1. Odagiri, Hiroyuki & Goto, Akira, 1996. "Technology and Industrial Development in Japan: Building Capabilities by Learning, Innovation and Public Policy," OUP Catalogue, Oxford University Press, number 9780198288022.
    2. Cockburn, Iain & Griliches, Zvi, 1988. "Industry Effects and Appropriability Measures in the Stock Market's Valuation of R&D and Patents," American Economic Review, American Economic Association, vol. 78(2), pages 419-423, May.
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    Citations

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    Cited by:

    1. Jun Hong Park & Sang Ho Kook & Hyeonu Im & Soomin Eum & Chulung Lee, 2018. "Fabless Semiconductor Firms’ Financial Performance Determinant Factors: Product Platform Efficiency and Technological Capability," Sustainability, MDPI, vol. 10(10), pages 1-22, September.
    2. Murat Ocak & Derya Fındık, 2019. "The Impact of Intangible Assets and Sub-Components of Intangible Assets on Sustainable Growth and Firm Value: Evidence from Turkish Listed Firms," Sustainability, MDPI, vol. 11(19), pages 1-23, September.
    3. Iwasa, Tomoko & Odagiri, Hiroyuki, 2004. "Overseas R&D, knowledge sourcing, and patenting: an empirical study of Japanese R&D investment in the US," Research Policy, Elsevier, vol. 33(5), pages 807-828, July.
    4. FUKUGAWA Nobuya, 2022. "Effects of the Quality of Science and Innovation on Venture Finance: Evidence from University Spinoffs in Japan," Discussion papers 22006, Research Institute of Economy, Trade and Industry (RIETI).
    5. Jun Hong Park & Hyunseog Chung & Ki Hong Kim & Jin Ju Kim & Chulung Lee, 2021. "The Impact of Technological Capability on Financial Performance in the Semiconductor Industry," Sustainability, MDPI, vol. 13(2), pages 1-20, January.
    6. Ovsiannikov, Kostiantyn, 2020. "Does Tokyo Stock Exchange Appreciate Corporate Innovations? Role of Patents’ Quality and Research Productivity," SocArXiv k4ys6, Center for Open Science.
    7. 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.
    8. Banri ITO & Tatsufumi YAMAGATA, 2007. "Who Develops Innovations In Medicine For The Poor? Trends In Patent Applications Related To Medicines For Hiv/Aids, Tuberculosis, Malaria, And Neglected Diseases," The Developing Economies, Institute of Developing Economies, vol. 45(2), pages 141-171, June.
    9. Mahlich, Jörg C. & Yurtoglu, Burcin, 2011. "Intangibles Kapital und Rentabilität in der Pharmaindustrie," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 65(1), pages 32-49.
    10. Jörg Mahlich, 2010. "Patents and performance in the Japanese pharmaceutical industry: An institution-based view," Asia Pacific Journal of Management, Springer, vol. 27(1), pages 99-113, March.
    11. Hashimoto, Akihiro & Haneda, Shoko, 2008. "Measuring the change in R&D efficiency of the Japanese pharmaceutical industry," Research Policy, Elsevier, vol. 37(10), pages 1829-1836, December.
    12. Federico Munari & Raffaele Oriani (ed.), 2011. "The Economic Valuation of Patents," Books, Edward Elgar Publishing, number 13561.

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    More about this item

    Keywords

    Patents; R&D stock; Tobin's q; JEL Classification: O32; O34; G12;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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