Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/225229 
Authors: 
Year of Publication: 
2020
Citation: 
[Journal:] KDI Journal of Economic Policy [ISSN:] 2586-4130 [Volume:] 42 [Issue:] 3 [Publisher:] Korea Development Institute (KDI) [Place:] Sejong [Year:] 2020 [Pages:] 33-52
Publisher: 
Korea Development Institute (KDI), Sejong
Abstract: 
Patents 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.
Subjects: 
Innovation
Firm Value
Tobin’s q
R&D
Patent
JEL: 
O30
O32
O34
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article

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