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Abstract
This paper applies an event study methodology to estimate the impact of patenting on firm value over the most comprehensive data set on patents to date. An event study model that accurately accounts for the ordinary pattern of stock market returns among patenting firms estimates nearly zero effect of patent grant events on firm value. This sample mean does not mask significant heterogeneity related to patent citation. These results may be due to the substantial noise involved in stock market returns, but methods recently devised for separating patent value signal from this noise do not produce credible patent value estimates.