Does The Stock Market Boost Firm Innovation
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Does The Stock Market Boost Firm Innovation
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Author : Hui He
language : en
Publisher: International Monetary Fund
Release Date : 2017-06-30
Does The Stock Market Boost Firm Innovation written by Hui He and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-06-30 with Business & Economics categories.
The paper analyses the effect of the stock market on firm innovation through the lens of initial public offering (IPO) using uniquely matched Chinese firm-level data. We find that IPOs lead to an increase in both the quantity and quality of firm innovation activity. In addition, IPOs expand a firm’s scope of innovation beyond its core business. The impact of IPOs on firm innovation varies across financial constraints, corporate governance, and ownership structures. Our results further illustrate that IPOs induce a firm to increase the number of inventors and enable better retention of existing inventors after the IPO. Finally, we show that the enhanced innovation activity resulting from IPOs increases a firm’s Tobin’s Q in the long run.
Does The Stock Market Boost Firm Innovation
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Author : Hui He
language : en
Publisher: International Monetary Fund
Release Date : 2017-06-30
Does The Stock Market Boost Firm Innovation written by Hui He and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-06-30 with Business & Economics categories.
The paper analyses the effect of the stock market on firm innovation through the lens of initial public offering (IPO) using uniquely matched Chinese firm-level data. We find that IPOs lead to an increase in both the quantity and quality of firm innovation activity. In addition, IPOs expand a firm’s scope of innovation beyond its core business. The impact of IPOs on firm innovation varies across financial constraints, corporate governance, and ownership structures. Our results further illustrate that IPOs induce a firm to increase the number of inventors and enable better retention of existing inventors after the IPO. Finally, we show that the enhanced innovation activity resulting from IPOs increases a firm’s Tobin’s Q in the long run.
Does Stock Liquidity Enhance Or Impede Firm Innovation
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Author : Vivian W. Fang
language : en
Publisher:
Release Date : 2015
Does Stock Liquidity Enhance Or Impede Firm Innovation written by Vivian W. Fang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
We aim to tackle the longstanding debate on whether stock liquidity enhances or impedes firm innovation in this paper. This topic is of particular interest to firm stakeholders and regulators, because innovation is crucial for firm and national level competitiveness and stock liquidity can be altered by financial market regulations. We use a difference-in-differences approach that relies on the exogenous variation in liquidity generated by regulatory changes in the cost of trading stocks and find that an increase in liquidity causes a reduction in future innovation. We then identify two possible mechanisms through which liquidity impedes innovation: increased exposures to hostile takeovers and higher presence of institutional investors who do not actively gather information about firm fundamentals or monitor. Both could result in a cut in investment in innovation to boost current earnings. Our paper shows a previously under-identified adverse consequence of liquidity: its hindrance to promoting firm innovation.
Do Innovations Really Payoff Total Stock Market Returns To Innovation
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Author : Ashish Sood
language : en
Publisher:
Release Date : 2014
Do Innovations Really Payoff Total Stock Market Returns To Innovation written by Ashish Sood and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Critics often decry an earnings-focused short-term orientation of management that eschews spending on risky, long term projects such as innovation in order to boost a firm's stock price. The critics' assume that stock markets respond to announcements of earnings that report immediate earnings and not of innovation that have a long-term payoff. Contrary to this position, the authors argue that the market's true appreciation of innovation can be estimated by assessing the total market returns to the entire innovation project The authors demonstrate this approach via the Fama-French 3 Factor Model (including Carhart's Momentum Factor) on 5481 announcements from 69 firms in 5 markets and 19 technologies, during the period 1977-2006.The authors find that total market returns to an innovation project are $643 million, more than 13 times the $49 million due to an average innovation event. Returns to negative events are higher in absolute value than those to positive events. Returns to development activities are higher than returns to either the setup or market activities. Returns are higher for smaller firms than larger firms. Returns to the announcing firm are substantially greater than those to competitors across all stages. The authors discuss the implications of the results.
Three Essays In Financial Markets The Bright Side Of Financial Derivatives Options Trading And Firm Innovation
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Author : Iván Blanco
language : en
Publisher: Ed. Universidad de Cantabria
Release Date : 2019-02-15
Three Essays In Financial Markets The Bright Side Of Financial Derivatives Options Trading And Firm Innovation written by Iván Blanco and has been published by Ed. Universidad de Cantabria this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-02-15 with Business & Economics categories.
Do financial derivatives enhance or impede innovation? We aim to answer this question by examining the relationship between equity options markets and standard measures of firm innovation. Our baseline results show that firms with more options trading activity generate more patents and patent citations per dollar of R&D invested. We then investigate how more active options markets affect firms' innovation strategy. Our results suggest that firms with greater trading activity pursue a more creative, diverse and risky innovation strategy. We discuss potential underlying mechanisms and show that options appear to mitigate managerial career concerns that would induce managers to take actions that boost short-term performance measures. Finally, using several econometric specifications that try to account for the potential endogeneity of options trading, we argue that the positive effect of options trading on firm innovation is causal.
How Venture Capital Works
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Author : Phillip Ryan
language : en
Publisher: The Rosen Publishing Group, Inc
Release Date : 2012-07-01
How Venture Capital Works written by Phillip Ryan and has been published by The Rosen Publishing Group, Inc this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-07-01 with Juvenile Nonfiction categories.
Explanations to the inner workings of one of the least understood, but arguably most important, areas of business finance is offered to readers in this engaging volume: venture capital. Venture capitalists provide necessary investment to seed (or startup) companies, but the startup is only the beginning, there is much more to be explored. These savvy investors help guide young entrepreneurs, who likely have little experience, to turn their businesses into the Googles, Facebooks, and Groupons of the world. This book explains the often-complex methods venture capitalists use to value companies and to get the most return on their investments, or ROI. This book is a must-have for any reader interested in the business world.
Markets For Technology
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Author : Ashish Arora
language : en
Publisher: MIT Press
Release Date : 2004-01-30
Markets For Technology written by Ashish Arora and has been published by MIT Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004-01-30 with Business & Economics categories.
The past two decades have seen a gradual but noticeable change in the economic organization of innovative activity. Most firms used to integrate research and development with activities such as production, marketing, and distribution. Today firms are forming joint ventures, research and development alliances, licensing deals, and a variety of other outsourcing arrangements with universities, technology-based start-ups, and other established firms. In many industries, a division of innovative labor is emerging, with a substantial increase in the licensing of existing and prospective technologies. In short, technology and knowledge are becoming definable and tradable commodities. Although researchers have made significant advances in understanding the determinants and consequences of innovation, until recently they have paid little attention to how innovation functions as an economic process. This book examines the nature and workings of markets for intermediate technological inputs. It looks first at how industry structure, the nature of knowledge, and intellectual property rights facilitate the development of technology markets. It then examines the impacts of these markets on firm boundaries, the division of labor within the economy, industry structure, and economic growth. Finally, it examines the implications of this framework for public policy and corporate strategy. Combining theoretical perspectives from economics and management with empirical analysis, the book also draws on historical evidence and case studies to flesh out its research results.
Firm Innovation In Emerging Markets
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Author : Meghana Ayyagari
language : en
Publisher: World Bank Publications
Release Date : 2012
Firm Innovation In Emerging Markets written by Meghana Ayyagari and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.
The authors investigate the determinants of firm innovation in over 19,000 firms across 47 developing economies. They define the innovation process broadly, to include not only core innovation such as the introduction of new products and new technologies, but also other types of activities that promote knowledge transfers and adapt production processes. The authors find that more innovative firms are large exporting firms characterized by private ownership, highly educated managers with mid-level managerial experience, and access to external finance. In contrast, firms that do not innovate much are typically state-owned firms without foreign competitors. The identity of the controlling shareholder seems to be particularly important for core innovation, with those private firms whose controlling shareholder is a financial institution being the least innovative. While the use of external finance is associated with greater innovation by all private firms, it does not make state-owned firms more innovative. Financing from foreign banks is associated with higher levels of innovation compared with financing from domestic banks.
Lbos Debt And R D Intensity
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Author : William F. Long
language : en
Publisher:
Release Date : 1993
Lbos Debt And R D Intensity written by William F. Long and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1993 with Business enterprises categories.
This paper deals with the impact on R&D intensity for firms undergoing a leveage buyout (LBO). We develop seven hypothesis.
From Efficiency Driven To Innovation Driven Economic Growth
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Author : Kim-Song Tan
language : en
Publisher: World Bank Publications
Release Date : 2005
From Efficiency Driven To Innovation Driven Economic Growth written by Kim-Song Tan and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Creative ability in business categories.
Looks at the rationale behind the re-orientation of the innovation policy in the past few years and describes the various measures that have been implemented in the past few years to facilitate the transition to an innovative economy.