Examining U.S. Patent Values: Renewal Choices, Citation Dynamics, and Economic Growth
41 Pages Posted: 10 Dec 2024
Date Written: December 10, 2024
Abstract
I use a combination of patent characteristics and patent renewal outcomes to develop individual patent-level estimates for the total lifetime private values of more than 3.3 million United States patents granted between 1983 and 2011. The timing of patent forward citations explains significantly more variation in patent values than simple counts of forward citations and the timing of patent forward citations relates to patent values differently through two distinct channels: a patent’s value or revenue flow at grant time and the rate at which this value flow depreciates. I compute technology-specific average patent values and average depreciation rates and demonstrate that technologies having larger average revenue flows at grant typically experience a higher intensity of creative destruction through faster average depreciation of patent values. I document that my estimated private patent values are broadly consistent with those obtained by other researchers, yet my estimates suggest an even stronger linkage between innovation activity and growth in output and productivity, while being applicable to a more extensive group of patents and suggesting a positive relationship between new technology shocks and employment.
Keywords: Patent valuation, intellectual property and intellectual capital, economic growth, innovation, ordered choice, patent renewal
JEL Classification: C25, G12, O32, O34, O47
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