Profitability decided by patent quality? An empirical study of the US semiconductor industry

The investment in research and development (R&D) for semiconductor industry is never small as the technology cycle time (TCT) is relatively short comparing to other industries, thus a semiconductor company requires lots of technological innovations and capital offerings to maintain. The semiconductor industry contributes primarily part of the micro-electronic industries. Advancing technology and patent application are the centre of attention within the semiconductor sector. This research examines the relationship between patent quality and the profits a patent creates for a company in this selected field. This study distinguishes itself from prior research by including cross-sectional data, time series data to simultaneously collect and analyze. The study result shows that some indicators of patent quality are statistically significant to return on assets.