Abstract
Purpone - Along with the in-depth implementation of national intellectual property strategies in China, China’s intellectual property law has been fully integrated with international norms. The number of patents in China is among the highest in the world and China has been the country with the largest number of patent applications in the world for five consecutive years. In addition, the incentive and protective role of the intellectual property system on economy, science, technology and culture has emerged.
Methodology - There are more than 3,000 A-share listed companies in mainland China, as the second largest stock market among global transactions, with the daily trading volume exceeding one trillion RMB. Its ups and downs are catching the eyes of global investors. Patents are the concrete manifestations of scientific and technological innovations. It is questionable if this specific performance can contribute to financial performance and if investment potential stocks can be exploited through patent indicators. In view of this, in this study, an empirical research was conducted on the data of the technology-based enterprises listed on the Shanghai A-share market from 2011 to 2017.
Findings - It is found in this study that, compared to stock prices, there is a significant leading period of specific patent indicators for more than one year. After the data back-testing of the stock exchange, the average performance of the investment potential stocks selected based on this research model is better than the market index performance.
Conclusion - Though the statistical test and time series algorithm of patent indicators, the leading patent formulas are deduced in this study, which can validly predict the stock price of listed companies and the lead period is up to one year, at least a quarter with predictive accuracy.
References
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- Grag, K. C., Padhi, P. (1998). Scientomertic study of laser patent literatüre. Scientomertics, vol.43, no.3, pp.443-454.
- Granger, C. W. J. (1969). Investing casual relations by econometric models and crossspectral method. Journal of Econometrica, vol. 37, pp.424-438.
- Granger, C. W. J. (1980). Testing for causality: a personal viewpoint. Journal of Economic Dynamics and Control, vol.2, pp.329-352.
- Hullmann, A., Meyer, M. (2003). Publications and patents in nanotechnology. Scientometrics, vol.58, pp. 507–527.
- Jincheol, B., Wonchang, H., Jaehong, L., Jaimin, G. (2017). Patent citations and financial analysts’ long-term growth forecasts. Sustainability, vol.9, no. 5, pp.846.
- KaiP, U. (2009). Patents and profit rates. Economics Letters, vol.104, pp.79-80.
- Lin, B. W., Chen, C. J., Wu, H. L. (2006). Patent portfolio diversity, technology strategy, and firm value. IEEE Transactions on Engineering Management, pp.17-26.
- Mazzucato, M., Tancioni, M. (2012). R&D, patents and stock return volatility. Journal of Evolutionary Economics, vol.22, pp. 811-832.
- Narin, F. (1995). Patent as indicators for the evaluation of industrial research output. Scientomertics, vol.34, pp. 3489-496.
- Shassan, M. (2016). Valuation of patents-comparative analysis. Journal of Scientometric Research, vol. 5, no. 3, pp.230-235.
- Suh, J. H. (2015). Exploring the effect of structural patent indicators in forward patent citation networks on patent price from firm market value. Technology Analysis and Strategic Management, vol. 27, no. 5, pp.1-18.
- Trajtenberg, M. (1990). The welfare analysis of product innovations with an application to computed tomography scanners. Journal of Political Economy, vol. 97, pp.445–479.
- Vitt, C. A., Xiong, H. (2015). The impact of patent activities on stock dynamics in the high-tech. 2015 IEEE International Conference on Sector Data Mining, pp.1550-4786.
- Yan, M. S., Liang, Q. Q. (2009). Patent indicator development research. Journal of Library and Information Science, vol. 35, no. 2, pp.88-106.
- Zheng, X. L., Chen, B. M. (2013). Stock market modeling and forecasting: a system adaptation approach. London: Springer-Verlag.
Abstract
References
- Chen, R., Chang, H. Y. (2015). Expansion of design patent: from united patents to continuation patents. Total quality management and business excellence, vol.32, pp.96-103.
- Ernst, H. (1995). Patenting strategies in the German mechanical engineering industry and their relationship to company performance. Technovation, vol. 15, pp.225-240.
- Ernst, H. (1997). The use of patent data for technological forecasting: the diffusion of CNC-technology in the machine tool industry. Small Business Economics, vol. 9, pp.361-381.
- Ernst, H. (2001). Patent applications and subsequent changes of performance: evidence from time-series cross-section analysis on the firm level. Research Policy, vol. 30, No. 1, pp.143-157.
- Gao, L., Porter, A. L., Wang, J., Fang, S., Zhang, X., Ma, T. T., Huang, L. (2013). Technology life cycle analysis method based on patent documents. Technological Forecasting & Social Change, vol.80, pp.398-407.
- Grag, K. C., Padhi, P. (1998). Scientomertic study of laser patent literatüre. Scientomertics, vol.43, no.3, pp.443-454.
- Granger, C. W. J. (1969). Investing casual relations by econometric models and crossspectral method. Journal of Econometrica, vol. 37, pp.424-438.
- Granger, C. W. J. (1980). Testing for causality: a personal viewpoint. Journal of Economic Dynamics and Control, vol.2, pp.329-352.
- Hullmann, A., Meyer, M. (2003). Publications and patents in nanotechnology. Scientometrics, vol.58, pp. 507–527.
- Jincheol, B., Wonchang, H., Jaehong, L., Jaimin, G. (2017). Patent citations and financial analysts’ long-term growth forecasts. Sustainability, vol.9, no. 5, pp.846.
- KaiP, U. (2009). Patents and profit rates. Economics Letters, vol.104, pp.79-80.
- Lin, B. W., Chen, C. J., Wu, H. L. (2006). Patent portfolio diversity, technology strategy, and firm value. IEEE Transactions on Engineering Management, pp.17-26.
- Mazzucato, M., Tancioni, M. (2012). R&D, patents and stock return volatility. Journal of Evolutionary Economics, vol.22, pp. 811-832.
- Narin, F. (1995). Patent as indicators for the evaluation of industrial research output. Scientomertics, vol.34, pp. 3489-496.
- Shassan, M. (2016). Valuation of patents-comparative analysis. Journal of Scientometric Research, vol. 5, no. 3, pp.230-235.
- Suh, J. H. (2015). Exploring the effect of structural patent indicators in forward patent citation networks on patent price from firm market value. Technology Analysis and Strategic Management, vol. 27, no. 5, pp.1-18.
- Trajtenberg, M. (1990). The welfare analysis of product innovations with an application to computed tomography scanners. Journal of Political Economy, vol. 97, pp.445–479.
- Vitt, C. A., Xiong, H. (2015). The impact of patent activities on stock dynamics in the high-tech. 2015 IEEE International Conference on Sector Data Mining, pp.1550-4786.
- Yan, M. S., Liang, Q. Q. (2009). Patent indicator development research. Journal of Library and Information Science, vol. 35, no. 2, pp.88-106.
- Zheng, X. L., Chen, B. M. (2013). Stock market modeling and forecasting: a system adaptation approach. London: Springer-Verlag.
Details
| Primary Language | English |
|---|---|
| Subjects | Library and Information Studies, Other Fields of Education, Labor Economics, Ethics, Behaviour-Personality Assessment in Psychology, Business Administration |
| Journal Section | Articles |
| Authors | |
| Publication Date | March 30, 2019 |
| Published in Issue | Year 2019 |
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