Abstract

The investors in the stock market place a value on patent portfolios of traded firms in addition to other corporate assets. A growing body of empirical literature has documented a significantly positive relationship between patents and firm market value. In addition, the market seems to recognize the different quality of different patent portfolios. Therefore, a better understanding of how the stock market evaluates firms’ patents can be important for managers and professionals. Accordingly, this chapter analyzes the theoretical and methodological foundations of the relationship between patents and market value and it reviews the main results of the empirical literature, discussing the implications for patent valuation.