Do Patents Lead to an Increase in Firm Value? Evidence from Korea

Lee, Jang Wook

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dc.contributor.authorLee, Jang Wook-
dc.description.abstractPatents are widely used in the literature as a measure of firm-level innovation. It is regarded that patents improve a firm’s operational environment and ultimately increase the value of the firm. However, the relationship between patents and firm value in Korea is under-explored in the literature due to the difficulty of constructing datasets. This paper examines whether patents in Korea increase the market value of a firm. To do this, I exploit novel data on firm-level patents and financial information of all listed Korean companies during the period of 1993-2015 and estimate the non-linear production-function type of Tobin’s q equations on R&D, patents, and citations. Surprisingly, I find that patents and citations are weakly associated with firm value, while R&D is strongly associated with an increase in firm value. These results direct imply that policymakers in Korea should enhance patenting incentives to encourage firms to innovate.en_US
dc.publisherKorea Development Instituteen_US
dc.titleDo Patents Lead to an Increase in Firm Value? Evidence from Koreaen_US
dc.identifier.bibliographicCitationKDI Journal of Economic Polilcy, vol. 42, no. 3, pp. 33-52-
dc.citation.titleKDI Journal of Economic Polilcyen_US
dc.subject.keywordInnovation; Firm Value; Tobin's q; R&D; Patenten_US
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