Measuring Innovation Quality: A Patent Analysis

Marku, Elona

doi:10.2139/ssrn.3311369

Cited by 2 publications

(3 citation statements)

References 45 publications

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“…With regard to patent citation, defined as a patent document cited by the applicant or third party, the truncation issue is even stronger as citations of a patent which usually will take years to be accumulated or considered matured, after a patent has been granted, for one to understand the patent's impact and performance. As posited in Marku (2018), the higher the impact of a patented invention on subsequent inventions, the higher will be the number of citations a patent receives. The truncation of patent-based data, from the scope of this study, is illustrated in Figure 1.…”

Section: Innovation Outputmentioning

confidence: 99%

Financial Sources and Firms’ Innovation Outputs: Analysis of JASDAQ Market

Che-Yahya

Matsuura

et al. 2022

IJBS

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The consensus that innovation is an essential strategy for firms, which aim to competitively survive over the long term, motivates growing literature to understand the drivers of firms’ innovation outputs. It is widely acknowledged that access to financial sources is fundamentally important for the survival of innovative firms. The lack of financial support may prevent the firms from entirely pursuing innovation activity and producing innovative outputs. However, this is rarely addressed in the finance literature. Focusing on both types of financing sources (internal and external), this study investigates their influence on firms’ innovation outputs. Leveraging on the spirit in Pecking Order Theory, this study proposes that firms adopt a hierarchy between types of financing from internal or self-financing to external, starting from low risk to risky debts and followed by the issuance of shares on their efforts in financing innovation and producing the outputs. Poisson regression results, using a sample of 113 manufacturing firms listed in JASDAQ market of the Tokyo Stock Exchange, revealed that both financing sources (internal and external) are important in driving volume and value of firms’ innovation outputs. However, the reliance of firms on self-generated financing conquers. This study, using patent-based data (application, publication, citation) to estimate firms’ technology outputs, also finds the complementary power of debt financing as an important financial source, particularly when firms’ internal financing source has exhausted. The findings of this study offer support to the assertion in the Pecking Order Theory concerning the risk inherited in the different financing sources.

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Section: Innovation Outputmentioning

confidence: 99%

Financial Sources and Firms’ Innovation Outputs: Analysis of JASDAQ Market

Che-Yahya

Matsuura

et al. 2022

IJBS

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“…Previous studies in the literature used new products or process improvements (Iyer et al 2006;Wolff and Pett 2006;Tsinopoulos et al 2018), R&D spending and capacity (Anagnostopoulou and Levis 2008;Brown et al 2009;Ehie and Olibe 2010;Rubera and Droge 2013;Broadstock et al 2019;Mohnen 2019;Zhang et al 2020), and patent filings and citations (Francis et al 2011;Galasso and Simcoe 2011;Hirshleifer et al 2012;Aghion et al 2013;Belenzon and Patacconi 2013;Nanda and Rhodes-Kropf 2013;Acharya et al 2014;Chang et al 2015;Kogan et al 2017;Sunder et al 2017;Mao and Zhang 2018;Marku 2018;Nguyen 2018;Fiordelisi et al 2019;Argente et al 2020;Yang et al 2021) as innovation measures.…”

Section: Measures Of Innovationmentioning

confidence: 99%

“…2017; Sunder et al . 2017; Mao and Zhang 2018; Marku 2018; Nguyen 2018; Fiordelisi et al . 2019; Argente et al .…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

CEO Risk Incentives and Innovation Premium*

Jung,

Park

2024

Asia-Pac J of Fin Stud

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We investigate the relationship between CEO risk incentives and the innovation premium (IP) proposed by Forbes. We suggest that compared to traditional proxies of innovation, the IP is a comprehensive measure of a firm's overall innovation and, therefore, can measure innovation effectiveness in broader industries. We find that both option vega and vega‐to‐delta ratio, as measures of CEO risk incentives, have a positive relationship with the IP. Additional tests reveal that the traditional patent‐related outputs are also motivated by CEO risk incentives, but only in the IT industry. Overall, our findings are consistent with (1) the empirical evidence of Coles et al. (2006, Journal of Financial Economics 79, 431) that a higher vega after controlling for delta motivates managers to implement riskier policy choices and (2) the argument (Dittmann et al. 2017, Review of Finance 21, 1805) that the strength of the risk‐taking incentive relative to the performance‐based incentive, the vega‐to‐delta ratio, captures CEO risk‐taking incentives more accurately.

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Measuring Innovation Quality: A Patent Analysis

Cited by 2 publications

References 45 publications

Financial Sources and Firms’ Innovation Outputs: Analysis of JASDAQ Market

Financial Sources and Firms’ Innovation Outputs: Analysis of JASDAQ Market

CEO Risk Incentives and Innovation Premium*

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