Valuation of new trademarks

Po-Hsuan Hsu; Dongmei Li; Qin Li; Siew Hong Teoh; Kevin Tseng

doi:10.1287/mnsc.2020.3887

Valuation of new trademarks

Po-Hsuan Hsu, Dongmei Li, Qin Li, Siew Hong Teoh, Kevin Tseng

School of Accounting and Finance

Research output: Journal article publication › Journal article › Academic research › peer-review

27 Citations (Scopus)

Abstract

Firms often register trademarks as they launch new products or services. We find that the number of new trademark registrations positively predicts firm profitability, stock returns, and underreaction by analysts in their earnings forecasts. Using the Federal Trademark Dilution Act (FTDA) as an exogenous shock to trademark protection, we find that greater trademark protection strengthens the predictability of new trademark registrations. Together, our evidence suggests that investors undervalue new trademark registrations.

Original language	English
Pages (from-to)	257-279
Journal	Management Science
Volume	68
Issue number	1
DOIs	https://doi.org/10.1287/mnsc.2020.3887
Publication status	Published - Jan 2022

Keywords

Innovation
Trademarks
Exploratory Trademarks
Stock Returns
Limited Attention
Uncertainty
Market Efficiency
Analyst Forecast
Anomalies
Trading Strategies

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10.1287/mnsc.2020.3887

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abstract = "Firms often register trademarks as they launch new products or services. We find that the number of new trademark registrations positively predicts firm profitability, stock returns, and underreaction by analysts in their earnings forecasts. Using the Federal Trademark Dilution Act (FTDA) as an exogenous shock to trademark protection, we find that greater trademark protection strengthens the predictability of new trademark registrations. Together, our evidence suggests that investors undervalue new trademark registrations.",

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KW - Trademarks

KW - Exploratory Trademarks

KW - Stock Returns

KW - Limited Attention

KW - Uncertainty

KW - Market Efficiency

KW - Analyst Forecast

KW - Anomalies

KW - Trading Strategies

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Valuation of new trademarks

Abstract

Keywords

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