The Importance of Being Steve: An Econometric Analysis of the Contribution of Steve Jobs's Patents to Apple's Market Valuation

Colorado College Working Paper No. 2013-1

13 Pages Posted: 29 Mar 2013  

Daniel K. N. Johnson

Colorado College - Department of Economics and Business

Sylvie Scowcroft

Colorado College - Department of Economics and Business

Date Written: March 26, 2013

Abstract

This paper evaluates the contribution of patent-related events to changes in stock prices, proposing that economics has traditionally failed to find much effect for two reasons which we identify and correct. First, patents vary widely in quality so we use quantile analysis and alternative measures of patent quality to identify effects. Second, we permit the possibility that information leaks out into investor sentiment during the long and uncertain time until patent grant, so evaluate the stock price effect at four different dates in the life of each patent. As a case study to test this approach, track all patents over a 27-year period for Apple Inc., permiting design patents to have different effects that traditional utility-model patents, and isolate the effect that Steve Jobs’s name on a patent has at each stage of a patent’s life.

Keywords: patent, Apple, valuation, design patent, event analysis

JEL Classification: G14, L25, L43, O3

Suggested Citation

Johnson, Daniel K. N. and Scowcroft, Sylvie, The Importance of Being Steve: An Econometric Analysis of the Contribution of Steve Jobs's Patents to Apple's Market Valuation (March 26, 2013). Colorado College Working Paper No. 2013-1. Available at SSRN: https://ssrn.com/abstract=2239933 or http://dx.doi.org/10.2139/ssrn.2239933

Daniel Kent Neil Johnson (Contact Author)

Colorado College - Department of Economics and Business ( email )

14 E Cache La Poudre Street
Colorado Springs, CO 80903
United States
719-389-6654 (Phone)
719-389-6927 (Fax)

HOME PAGE: http://faculty1.coloradocollege.edu/~djohnson

Sylvie Scowcroft

Colorado College - Department of Economics and Business ( email )

14 E Cache La Poudre Street
Colorado Springs, CO 80903
United States

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