Working Paper: NBER ID: w19647
Authors: David S. Abrams; Ufuk Akcigit; Jillian Grennan
Abstract: Prior work suggests that more valuable patents are cited more. Using novel revenue data for tens of thousands of patents held by non-practicing entities (NPEs), we find that the relationship between citations and value forms an inverted-U, with fewer citations at the high end of value than in the middle. We explain the inverted-U with a model of innovation that has productive and strategic patents. Empirically, we observe more strategic patents where the model predicts: among inventors in fields of rapid development and where divisional applications are employed. These findings have important implications for our understanding of growth, innovation, intellectual property policy, and patent valuation.
Keywords: patent value; citations; innovation; strategic patenting; nonpracticing entities
JEL Codes: K1; L2; O3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| productive innovations (O35) | patent value (O34) |
| strategic innovations (O35) | patent value (O34) |
| strategic innovations (O35) | citations (A14) |
| patent value (O34) | strategic innovations (O35) |
| citations (A14) | strategic innovations (O35) |
| patent value (O34) | citations (A14) |
| citations (A14) | patent value (O34) |