Resource title

What do patent indicators really measure - testing current theory on value drivers of innovations within a structural two-stage discrete choice simultaneous equation model

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Patent indicators are widely used to assess innovative output. Despite thelarge variety of empirical studies in the field, however, the precise meaningof these indicators and their obvious relation to patent value is still based onassumptions and intuitions. This paper provides the first empirical test ofpatent indicators as value measures in the structural form. It disentangles thedifferent effects reflected in patent indicators and enhances ourunderstanding why inventions are valuable at all. Using a newly assembleddata set on European polymer patents, current assumptions on theinnovation incentives set by patentability requirements (novelty, inventiveactivity) are tested. The estimations are carried out using a custom-tailoredtwo stage discrete choice probit model yet unknown in the literature. Theresults support the assumptions that novelty and inventive activity enhance apatent’s value. They confirm the importance of backward citations, familysize, and forward citations as va lue indicators. However, they expand onand partly break with the respective explanations why patent indicatorscorrelate with profitability.

Resource author

Markus Reitzig

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Resource language

eng

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application/pdf

Resource resource URL

http://hdl.handle.net/10398/6807

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