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  • June 2022
  • Article
  • Review of Financial Studies

The Use and Misuse of Patent Data: Issues for Finance and Beyond

By: Josh Lerner and Amit Seru
  • Format:Print
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Abstract

Patents and citations are powerful tools for understanding innovation increasingly used in financial economics (and management research more broadly). Biases may result, however, from the interactions between the truncation of patents and citations and the changing composition of inventors. When aggregated at the firm level, these patent and citation biases can survive popular adjustment methods and are correlated with firm characteristics. These issues can lead to problematic inferences. We provide an actionable checklist to avoid biased inferences and also suggest machine learning as a potential new way to address these problems.

Keywords

Patents; Analytics and Data Science; Corporate Finance; Research

Citation

Lerner, Josh, and Amit Seru. "The Use and Misuse of Patent Data: Issues for Finance and Beyond." Review of Financial Studies 35, no. 6 (June 2022): 2667–2704.
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About The Author

Josh Lerner

Entrepreneurial Management
→More Publications

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  • Financial Acquisitions By: Josh Lerner, Amit Seru and Jennifer Zou
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  • Yinglan Tan: Scaling a Venture Capital Firm in Southeast Asia By: Josh Lerner
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