Toward the Definition of a Structural Equation Model of Patent Value

PLS Path Modelling with Formative Constructs

Abstract

This paper aims to propose a structural equation model which relates the variables that determine the patent value. Even though some patent indicators have been directly used to infer the private or social value of innovations, the results suggest that patent value is a more complex variable that may be modeled as an endogenous unobservable variable in a first- and in a second-order model, and which depends respectively on three and four constructs. Such variables include the knowledge used by companies to create their inventions, the technological scope of the inventions, the international scope of protection, and the technological usefulness of the inventions. The model allows the conceptualization of patent value into a potential and a recognized value of intangible assets, aiming toward an index construction approach. Partial least square (PLS) path modelling is performed as an exploratory model-building procedure. We use a sample of 2,901 patents granted in the United States in the field of renewable energy.