The market valuation of international patenting using a real option approach: the moderating role of uncertainty

The article assesses the option value embedded in a firm’s patent assets relying on the Tobin's q market value model. In particular, novel empirical evidence on the market valuation of patent strategies is provided with regard to the major European R&D reporting firms. International patent applications filed under the Patent Cooperation Treaty enhance the option value effect more than IP protection pursued through a national patenting strategy: conditions of uncertainty regarding the firm and the market positively moderate the relative impact of the international patent. Several managerial implications for improving a firm’s decision making are discussed.