This study examines how patent portfolios relate to market capitalization in an economy where intangible assets account for roughly 90% of corporate value. Using a 10-year panel (2015-2024) of 40 public firms across technology, pharmaceutical, and consumer sectors, I estimate OLS, firm fixed-effects, and generalized estimating equation models within the Hall-Jaffe-Trajtenberg valuation framework to test whether citation-weighted patent quality outperforms raw patent quantity as a predictor of market value. Results show that citation elasticity (β₃ = 0.26-0.31, p < 0.01) is approximately 2-3× larger than the elasticity of patent productivity (β₂ = 0.06-0.12), indicating that patent quality is substantially more informative for valuation than simple counts. Technical founder-CEOs sustain about 22% higher R&D intensity and exhibit a positive interaction with citation quality, while geographic filing breadth serves as a cost-effective quality proxy: only 3.3% of Chinese patents are filed internationally versus more than 70% for advanced economies. Sector heterogeneity is pronounced, with the patent-value relationship strongest in pharmaceuticals (ρ ≈ 0.71), moderate in semiconductors, and weak and often statistically insignificant in consumer goods. Case studies of NVIDIA's decade-long CUDA investment, Intel's forgone AI platform bets, and a projected 2025-2030 pharmaceutical "patent cliff" illustrate the mechanisms by which technical leadership and AI-enabled drug discovery reshape the economic returns to patents. The findings imply that conventional patent metrics systematically mismeasure innovation value and suggest that investors, corporate strategists, and policy makers should overweight citation velocity and geographic breadth-rather than raw counts-when evaluating innovation-driven market value.

We examine whether firms with high organization capital (OC) are more likely to purchase Directors’ and Officers’ (D&O) liability insurance, using a panel of Chinese A-share listed companies from 2009 to 2021. We document a robust positive association between OC and the propensity to carry D&O insurance. The effect remains statistically and economically significant after controlling for firm characteristics and employing multiple identification strategies to address endogeneity. We propose two economic channels through which OC affects D&O insurance demand, namely, agency and information asymmetry. Consistent with these mechanisms, we find that the positive OC–D&O relationship is significantly stronger in firms with weaker internal governance and those facing opaquer information environments. Additional cross-sectional analyses show that this effect is concentrated in privately-owned firms and in regions with more developed market institutions, suggesting that external pressures accentuate the value of insuring key decision-makers. Our results are robust to alternative model specifications and remain stable after using propensity score matching, instrumental variable approaches, and the Heckman two-stage model. Overall, the findings highlight OC as a critical internal driver of corporate insurance decisions. Firms with substantial intangible assets strategically obtain D&O coverage to strengthen governance and reduce information frictions, especially in emerging markets like China where formal investor protections are still evolving.

How much value has been lost in the Chinese bankruptcy system due to excessive liquidation of companies whose going concern value is greater than the liquidation value? I compile new judiciary bankruptcy auction data covering all bankruptcy asset sales from 2017 to 2022 in China. I estimate the valuation of the asset for both the final buyer and creditor through the revealed preference method using an auction model. On average, excessive liquidation results in a 13.5% welfare loss. However, solely considering the liquidation process, an 8% welfare gain is derived from selling the asset without transferring it to the creditors. Firms that are (1) larger in total asset size, (2) have less information disclosure, (3) have less access to the financial market, and (4) possess a higher fraction of intangible assets are more vulnerable to such welfare loss. Overall, this paper suggests that policies promoting bankruptcy reorganization by introducing distressed investors who target larger bankruptcy firms suffering more from information asymmetry will significantly enhance welfare in the Chinese bankruptcy market.

How much value has been lost in the Chinese bankruptcy system due to excessive liquidation of companies whose going concern value is greater than the liquidation value? I compile new judiciary bankruptcy auction data covering all bankruptcy asset sales from 2017 to 2022 in China. I estimate the valuation of the asset for both the final buyer and creditor through the revealed preference method using an auction model. On average, excessive liquidation results in a 13.5% welfare loss. However, solely considering the liquidation process, an 8% welfare gain is derived from selling the asset without transferring it to the creditors. Firms that are (1) larger in total asset size, (2) have less information disclosure, (3) have less access to the financial market, and (4) possess a higher fraction of intangible assets are more vulnerable to such welfare loss. Overall, this paper suggests that policies promoting bankruptcy reorganization by introducing distressed investors who target larger bankruptcy firms suffering more from information asymmetry will significantly enhance welfare in the Chinese bankruptcy market.

We decompose the difference between a firm’s market and book values into two components: intangible assets that can be created by competing firms through SG&amp;A/R&amp;D expenditures, and the residual denoted as franchise value (FV). The estimated parameters in the model for creating intangible assets by capitalizing R&amp;D/SG&amp;A expenditures vary significantly across industries. Consistent with FV being a measure of economic rents and quasi-rents, ceteris paribus, higher FV firms face fewer product market threats, have higher markups, and their investments are less sensitive to their total Tobin’s Q. In contrast, firms with higher capitalized intangible assets, face higher product market threats.