NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Patent Value and Citations: Creative Destruction or Strategic Disruption?

David S. Abrams, Ufuk Akcigit, Jillian Grennan

NBER Working Paper No. 19647
Issued in November 2013, Revised in December 2018
NBER Program(s):Economic Fluctuations and Growth, Industrial Organization, Law and Economics, Productivity, Innovation, and Entrepreneurship

Prior work suggests that more valuable patents are cited more. Using novel revenue data for tens of thousands of patents held by non-practicing entities (NPEs), we find that the relationship between citations and value forms an inverted-U, with fewer citations at the high end of value than in the middle. We explain the inverted-U with a model of innovation that has productive and strategic patents. Empirically, we observe more strategic patents where the model predicts: among inventors in fields of rapid development and where divisional applications are employed. These findings have important implications for our understanding of growth, innovation, intellectual property policy, and patent valuation.

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Document Object Identifier (DOI): 10.3386/w19647

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