Patent Technological Field and Financial Performance of Malaysian Firms

Abstract

The patent specification within the patent system consists of valuable information regarding the characteristics of an invention. This includes the patent's technological fields and citations. Statistics show that Malaysia's manufacturing industries constitute its largest exporting industries compared to other industries with the U.S. being Malaysia's largest trading partner since the 1990s. The objective of this study is to examine how far does the patent technology field given impact on the financial performance at the Malaysian firm level. By segregating the patent technology field into two categories, 1) Human Necessities and Performing Operations, and 2) Mechanicals and Electronics, this study measures the financial performance based on the patent application and renewal stocks from within the patent system. This study applied a panel dataset from 1994 to 2008 and the model is estimated using panel least square, fixed effects model, and random effects model. It is found that the mechanicals and electronics technological field demonstrate more statistically significant variables compared to the human necessities and performing operations field. This findings are not surprising as Malaysia's largest export in the manufacturing industries is the mechanicals / electronics technology field.