The value of trademarks

We create a new measure of the value of an important, but previously understudied, type of intangible asset--trademarks. We quantify the stock market reaction to the publication of almost one million individual trademarks manually matched to their corporate owners. We find that trademarks possess substantial economic value for firms: the average individual trademark is worth $36.76 million, and the annual output of new trademarks represents approximately 2% of total assets. Firms that publish trademarks subsequently invest more in physical capital, hire more employees, increase production output, become more profitable, and increase their market share considerably. To establish the causal nature of these findings we exploit the quasi-random assignment of USPTO examiners to trademarks. Trademarks are complementary to patents and positively correlated with measures of knowledge capital, suggesting a strong association between trademarking and innovation. These results imply that trademarks are an important determinant of firm value and growth.