Chi, T (Chi, Tailan); Levitas, E (Levitas, Edward) AN EXAMINATION OF OPTIONS EMBEDDED IN A FIRM'S PATENTS: THE VALUE OF DISPERSION IN CITATIONS REAL OPTIONS THEORY, 24: 405-427 2007

[Eugene Garfield]

Email Address: chi at ku.edu 

Author(s): Chi, T (Chi, Tailan); Levitas, E (Levitas, Edward) 

Title: AN EXAMINATION OF OPTIONS EMBEDDED IN A FIRM'S PATENTS: THE VALUE 
OF DISPERSION IN CITATIONS 

Source: REAL OPTIONS THEORY, 24: 405-427 2007 

Book series title: ADVANCES IN STRATEGIC MANAGEMENT : A RESEARCH ANNUAL 

Language: English 

Document Type: Article 

Keywords Plus: R-AND-D; MARKET VALUE; TOBINS-Q; INNOVATION; INDUSTRY; 
BIOTECHNOLOGY; COLLABORATION; PERFORMANCE; ESTIMATORS; VALUATION 

Abstract: This paper applies and empirically tests a real options approach 
to conceptualizing the value of patents. Based on a theorem derived by 
Merton (1973), we propose that greater dispersion in the citations of a 
firm's patents represents greater flexibility for the firm to exercise the 
option rights embedded in the patents and thus enhances the option value 
of the patents. A test of this proposition using a sample of 128 US-based 
biotechnology firms found corroborative results. 

Addresses: [Chi, Tailan] Univ Kansas, Sch Business, Lawrence, KS 66045 
USA; [Levitas, Edward] Univ Wisconsin, Sheldon B Lubar Sch Business Adm, 
Milwaukee, WI 53201 USA 

Reprint Address: Chi, T, Univ Kansas, Sch Business, Lawrence, KS 66045 
USA. 

Cited Reference Count: 44 

Times Cited: 4 

Publisher: EMERALD GROUP PUBLISHING LIMITED 

Publisher Address: HOWARD HOUSE, WAGON LANE, BINGLEY, W YORKSHIRE BD16 
1WA, ENGLAND 

ISSN: 0742-3322 

DOI: 10.1016/S0742-3322(07)24015-X 

29-char Source Abbrev.: ADV STRAT M 

Source Item Page Count: 23 

ISI Document Delivery No.: BIL53 

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