Innovation and Market Value
PRODUCTIVITY, INNOVATION AND ECONOMIC PERFORMANCE, Barrell, Ray, Geoffrey Mason, and Mary O'Mahoney, eds., Cambridge University Press, 2000
Posted: 30 Jun 1999
There are 3 versions of this paper
Innovation and Market Value
Abstract
This paper surveys recent findings about how the financial markets value the knowledge assets of publicly traded firms. The motivation for using market value equation to price knowledge assets is discussed and the theory behind this equation is briefly presented. Then the empirical literature that relates Tobin's q to R&D and patent measures is surveyed and new results based on U.S. data through 1995 are presented. The conclusion is that the market value of the modern manufacturing corporation is strongly related to its knowledge assets, and that patent measures contain information about this value above and beyond that conveyed by the usual R&D measure.
JEL Classification: G12, O30, O32, O34
Suggested Citation: Suggested Citation