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Real Options, Patent Value and Financial Measurement Indicators: Evidence from the Taiwanese IT Industry
Ming - Cheng Wu,
National Changhua University of Education
Chun - Yao Tseng, Tunghai University
ABSTRACT. This study presents a sensitivity analysis of the patent evaluation model within a real options framework, while considering the uncertainties associated with both project value and investment cost, and develops an empirical analysis method for examining these relationships using an unbalanced two-way fixed effects model. The real options framework is adopted to search for appropriate effect factors of patent value. The empirical results indicate that the patent value increases with increasing ‘patent counts’ and ‘time to maturity’, and with decreasing ‘R&D per patent’. The impacts of the above three factors on patent value are also consistent with our theoretical model.
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