Document Type
Working Paper
Publication Date
2006
Language
en-US
Abstract
The value of patent rents is an important quantity for policy analysis. However, estimates in the literature based on patent renewals might be understated. Market value regressions could provide validation, but they have not had clear theoretical foundations for estimating patent rents. I develop a simple model to make upper bound estimates of patent rents using regressions on Tobin's Q. I test this on a sample of US firms and find it robust to a variety of considerations. My estimates correspond well with estimates based on patentee behavior outside the pharmaceutical industry, but renewal estimates might be understated for pharmaceuticals.
Recommended Citation
James Bessen,
Estimates of Patent Rents from Firm Market Value
(2006).
Available at:
https://scholarship.law.bu.edu/faculty_scholarship/3189
