Who do you trust while Shares are on a Roler-Coaster Ride? Balance Sheet and Patent Data as Sources of Investor Information During Volatile Market Times

Fred Ramb and Markus Reitzig

No 05-15, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

Abstract: We originally investigate the comparative usefulness of patent data as a source of investor information depending on the market cycle (bull/bear market). Based on comprehensive data for firms listed on German exchanges between 1997 and 2002, we demonstrate that patent data contain complementary explanatory power to accounting data irrespective of the standard used to prepare the financial statement (German GAAP, IAS and US GAAP). Moreover, we provide original evidence that only patent data are able to provide plausible investor information in both bull-market and bear-market periods, whereas accounting information overvalues intangible assets in bull markets and undervalues them in bears.

Keywords: Investor information; market value; patents (search for similar items in EconPapers)
JEL-codes: D82 G14 K11 M41 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-cfn, nep-fin and nep-fmk
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Persistent link: https://EconPapers.repec.org/RePEc:aal:abbswp:05-15

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