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Research on Telecom Investment Abstract It is widely known that the telecom industry is the hub of innovation starting from the early days of Bell Labs, and that these companies garner a substantial number of patents every year. However, there is little in terms of research on the effect of patents on the revenues and stock prices of respective telecom companies. This paper investigates the effect of patents (granted) on the sales revenues and stock prices of the top three telecom companies in the US. We developed several models using longitudinal data for these companies, which reveal interesting observations of the lagged effect of patents on revenues and stock prices. The models included the following sets of independent variables: a) the number of patents (and the lagged numbers from prior four years), b) cumulative sum of patents, c) rate of change of patents, and d) moving sum of patents (over 5 years). Each of these models involved running multiple regressions to determine the effect of patents on the level of sales revenues and stock prices, separately. Finally, to de-trend the sales revenue from the overall growth of the industry, we also ran each of these models on the rate of change of sales revenue instead of using the level of sales. The regressions for these models produced significant results on the basis of R2. Furthermore, the independent variables showed statistical significance using t-statistic and p-value measures. While these results confirm our hypothesis of the lagged effect of patent grants on the sales revenues and stock prices of major US telecom companies, future work would investigate modeling this effect in overseas markets and also smaller US telecom companies. Background It is well established that technological change impacts the aggregate production function as shown by Solow (1957). More importantly, there is ample research that R&D investment impacts the corporate revenues and profit growth demonstrated by Morbey (1989). The early work on the effect of R&D investment was published in semiconductor industry by Hall and Ziedonis (2001). There are also models, which show the effect of R & D investment on the corporate performance by Ko, et al. (2005) and Kaiser (2006). Model It is widely known that the telecom industry is the hub of innovation starting from the early days of Bell Labs, and that these companies garner a substantial number of patents every year. However, there is little in terms of research on the effect of patents on the revenues and stock prices of respective telecom companies. This paper investigates the effect of patents (granted) on the sales revenues and stock prices of the top three telecom companies in the US. We developed several models using longitudinal data for these companies, which reveal interesting observations of the lagged effect of patents on revenues and stock prices. The following show the different versions of the model: The number of patents (and the lagged numbers from prior four years) The regression equation is given below for estimating the sales revenue based on the number of patents for the current year and those granted in the previous four years. R1 =α0+ β0P0+ β1P1+ β2P2+ β3P3+ β4P4 R1=Net sales revenue for the year, taking thousand as a unit. P0=No. of patents granted in current year. Pt=No. of patents granted - 1 year lag. P2=No. of patents granted - 2 year lag. P3=No. of patents granted - 3 year lag. P4=No. of patents granted - 4 year lag. To get the details of the author and to receive a complimentary copy of the article , please e-mail at info@4gwirelessjobs.com.