The economic value of patent protection and rivalry in the Spanish electrical sector

Purpose: The purpose of this paper is to estimate the economic value of patent protection and the resulting rivalry. Design/methodology/approach: An event-study is applied which uses the daily returns of shares on the stock market as an output; and a model is estimated which bases its output on Tobin's q with annual observations. Findings: The results are determined by the methodology used and the measurement of the output dimensions of company performance. Both methodologies conclude that the patent application date is the determiner of the value of an innovation. The event study methodology reflects the positive value of patent protection. Research limitations/implications: The generalisation of the conclusions of the study to other economic sectors should be made with caution, given the fact that only the electrical sector was analysed. Originality/value: The literature available on this subject suggests that empirical evidence can be affected by operational problems related to the measurement of inventive input and output. As a new contribution to the field, the paper discovers the date of input (application or grant of the patent or both) on which the company manifests innovation.