The Market Value of Innovation

European Journal of Economics, Finance and Administrative Sciences, No. 36, 2011

23 Pages Posted: 12 Dec 2011

See all articles by Marco Appolloni

Marco Appolloni

University of Bologna - School of Economics, Management, and Statistics

Rocco Corigliano

University of Bologna - Department of Management

Andi Duqi

University of Bologna - Department of Management; University of Bologna - Yunus Social Business Centre

Giuseppe Torluccio

University of Bologna - Department of Management; Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN)

Date Written: December 12, 2011

Abstract

This study examines the relationship between the market value of the firm and part of its intangible capital. Two types of intangible capital are investigated: the flow of R&D expenditures and a measure of R&D stock. The paper analyses the empirical results in each national context which is characterized by sharp structural differences. We also investigate how and to what extent the different legal and corporate governance regimes, and thus the different degrees of investor protection, affect a firm’s corporate value and the market valuation of R&D investments. The analysis is performed in a panel dataset of European listed companies from 2000 to 2009. The results indicate that information relating to research and development plays a key role in determining the market value of companies. The market evaluates not only the present but also the past investment in R&D. Overall, our evidence suggests that significant differences between countries emerge in the market valuation of research and development. These differences reflect the distinct features of the financial systems herein considered.

Keywords: innovation, R&D, market value

JEL Classification: C31, G15, G32, O32

Suggested Citation

Appolloni, Marco and Corigliano, Rocco and Duqi, Andi and Torluccio, Giuseppe, The Market Value of Innovation (December 12, 2011). European Journal of Economics, Finance and Administrative Sciences, No. 36, 2011, Available at SSRN: https://ssrn.com/abstract=1971156 or http://dx.doi.org/10.2139/ssrn.1971156

Marco Appolloni

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

Rocco Corigliano

University of Bologna - Department of Management ( email )

Via Capo di Lucca 34
Bologna, 40126
Italy

Andi Duqi (Contact Author)

University of Bologna - Department of Management ( email )

Piazza Scaravilli 1
Bologna, Bologna 40126
Italy

University of Bologna - Yunus Social Business Centre

Piazzale della Vittoria 15
Forlì, FC 47122
Italy

Giuseppe Torluccio

University of Bologna - Department of Management ( email )

via Capo di Lucca 34
40126 Bologna
Italy
+39 051 2098085 (Phone)

HOME PAGE: http://WWW.SA.UNIBO.IT

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN) ( email )

via Berengario 51
Modena, modena I-41100
Italy

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