Research

New Research

The Value of Trademarks

(with E. Gavrilova, R. Silva, and M. Soares)

Revise and Resubmit at the Journal of Financial Economics

Summary: Trademarks are an economically valuable intangible asset for firms and an important driver of firm growth.

Abstract: We create a new measure of the value of an important, but previously understudied, intangible asset--trademarks. We quantify the stock market reaction to the publication of almost one million individual trademarks manually matched to firms. We find that trademarks are used ubiquitously and possess substantial value: the median trademark is worth $22.5 million. Firms that publish trademarks subsequently launch new products, increase sales, invest more in physical capital, hire more employees, increase production output, become more profitable, and increase their market share considerably. For identification, we exploit the quasi-random assignment of USPTO examining attorneys to trademarks.

Working Papers

Biased Regulators: Evidence from Patent Examiners

Summary: In-group biases affect decisions of patent examiners and are costly to start ups and inventors.

Abstract: Are regulators biased? I show that in-group biases affect patent grant decisions, using a novel hand-collected biographical dataset on examiners at the United States Patent and Trademark Office. I find that examiners are more likely to grant patents to inventors from their own racial group or gender than to other applicants. I exploit the random assignment of examiners to applicants ensuring that differences in quality of applications cannot explain the results. The effects are more pronounced when group membership is salient such as in periods of high racial conflict and also when examiner attention is limited. Biased examiner decisions lower the quality of patents, startup formation, as well as firms’ likelihood of raising venture capital and going public. In sum, these findings suggest that biases of individual regulators might distort the allocation of economically important property rights such as patents.

Attention-Induced Information Dry-Ups

Summary: When institutional investors reduce their attention to a firm, analysts reduce their effort and issue more biased and erroneous forecasts for the firm.

Abstract: I exploit exogenous shocks to the attention of institutional investors to show that sell-side analysts decrease effort on a given stock when institutional investors are paying less attention. Reduced effort on one stock is associated with additional effort on other stocks covered by the same analyst at the same point in time, suggesting that analysts re-optimize effort allocation across the stocks they cover. My results provide new empirical evidence on the impact of institutional investors on the information supply of analysts. They also offer a way to think about “information dry-ups,” i.e., periods in which the information environment deteriorates for specific firms at specific times, because institutional investors fail to monitor and sell-side analysts reduce effort at the same time.

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