Patented Innovation and Firm Value in the U.S. Food and Drink Industry: The Economic Importance of High-Quality Product Innovation

Abstract

We use patent data to study product, process, and marketing innovation in the food and drink industry. From 1994 to 2005, only 61 of 194 U.S. public food and drink manufacturers patented some type of innovation. Furthermore, we find patent ownership is most common to large corporations, and most patented innovations relate to new designs and processes as opposed to new products. According to our empirical panel analysis, however, stock market investors find patent ownership of new product innovations the most valuable, although the intensity of patent ownership is not of utmost importance. Instead, we conclude patent quality is better able to explain variability in the stock market valuation of U.S. food and drink manufacturers. Specifically, a one-percent increase in the quality of patented innovations in food and drink products facilitates a 0.07 % increase in firm value, corresponding to almost $6 million for the mean innovating firm in the U.S. public food and drink industry.

Revisiting incremental product innovations in the food-manufacturing industry: an empirical study on the effect of intellectual property rights

“…The results of this analysis indicate that technological innovations have no significant impact on firm performance. These results are not consistent with the findings of Grashuis and Dary (2019), who investigated the food-and beverage-manufacturing industry in the US and found qualified patents increase firm value. This inconsistency seems to represent a difference of market structure between the US and Japan.…”

Impact of R&D, patents and innovations disclosure on market capitalization: Russian evidence

“…Fu and Jian (2018) confirm a positive relationship from property rights protection to corporate R&D and show the mediation effect of financial access on this positive relationship. Most studies focus on the relationship between the number of patents and market indicators of companies such as Tobin'Q, market value, stock price and return on equity (Amin and Aslam, 2017;Ben-Nasr et al, 2021;Chung et al, 2019;Fitzgerald et al, 2021;Grashuis and Dary, 2019). The authors find that many investors deliberately examine information about company's patents while making investment decisions.…”

Mengukur Kinerja Pasar Melalui Elemen Inovasi pada UKM Sektor Makanan dan Minuman di Kota Padang

“…Sebagai contoh, pemahaman inovasi pemasaran dapat mendorong inovasi produk dan kinerja pasar UKM melalui informasi-informasi permintaan konsumen (Aksoy, 2017). Secara keseluruhan, aktifitas inovasi memberikan UKM alat-alat untuk mempersingkat product life cycle dan meningkatkan kemampuan mereka dalam mempertahankan usahanya (Chen, 2006), terutama pada bisnis kecilmenengah di sektor makanan dan minuman (Grashuis & Dary, 2019).…”

“…Kinerja pasar UKM disektor makanan dan minuman yang meningkat adalah bukti dari keberhasilan strategi dari aktor UKM untuk bertahan dan memperluas pangsa pasar mereka (Roucan-Kane et al, 2011). Penelitian Abdilahi et al (2017 dan Aksoy (2017) menemukan bahwa pengaruh yang signifikan dan positif dari inovasi pemasaran pada kinerja pasar pada UKM, khususnya di sektor makanan dan minuman (Adnan & Ahmad, 2015;Grashuis & Dary, 2019). H1: Inovasi pemasaran berpengaruh positif dan signifikan pada kinerja pasar Ramirez et al (2018) menyatakan inovasi pemasaran memberikan keunggulan kompetitif yang berkelanjutan, karena mengubah kebiasaan lama menjadi baru (Saunila, 2017).…”