Patent citation, R&D spillover, and Tobin's Q: Evidence from Taiwan semiconductor industry

Chen Lung Chin, Picheng Lee, Hsin Yi Chi, Asokan Anandarajan

Research output: Contribution to journalArticlepeer-review

34 Scopus citations


Although prior research has examined the effect of patent citations on Tobin's Q in a variety of environments, in this study we examine whether the parameters are affected by stage of a company in the value chain. Unlike other national semiconductor firms, Taiwanese semiconductor firms typically specialize in one of the value-added activities, namely, either design or manufacturing or packaging and testing. Our finding is that the effect of patent citation on Tobin's Q is accentuated when the firm is at the front end of the value chain and diminishes as we proceed to the back end. This finding is novel in the literature. We also find that frequency of patent citations and R&D spillover are positive and significant in relation to Tobin's Q. In addition, the effect of R&D spillover on Tobin's Q is more pronounced for firms in the design sector relative to other sectors.

Original languageEnglish (US)
Pages (from-to)67-84
Number of pages18
JournalReview of Quantitative Finance and Accounting
Issue number1
StatePublished - Feb 2006

All Science Journal Classification (ASJC) codes

  • Accounting
  • General Business, Management and Accounting
  • Finance


  • Patent citation
  • R&D spillover
  • Tobin's Q


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