AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Innovation α: What Do IP-Intensive Stock Price Indexes Tell Us about Innovation?
AEA Papers and Proceedings
vol. 110,
May 2020
(pp. 31–35)
Abstract
Patents and other intellectual property (IP) have grown in relative importance in investments and market capitalizations of public firms (e.g., Corrado and Hulten 2010). This paper illustrates the construction of IP-intensive stock price indexes, focusing on a network analysis tool (Martin 2001, Winer et al. 2003, Luse and Martin 2014) that helps pinpoint firms that are most likely to generate value from their intangible assets. The analysis finds that (a) stock price indexes constructed using the tool yield above-average returns and (b) stock prices of US companies in two tech-driven sectors outperform non-US firms despite lower average patent portfolio valuations.Citation
Corrado, Carol, David Martin, and Qianfan Wu. 2020. "Innovation α: What Do IP-Intensive Stock Price Indexes Tell Us about Innovation?" AEA Papers and Proceedings, 110: 31–35. DOI: 10.1257/pandp.20201056Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- G12 Equities; Fixed Income Securities
- O31 Innovation and Invention: Processes and Incentives
- O34 Intellectual Property and Intellectual Capital
- D22 Firm Behavior: Empirical Analysis
- G12 Equities; Fixed Income Securities
- O31 Innovation and Invention: Processes and Incentives