Innovation source, advancement stage and company stock returns

Dawid Szutowski

The Service Industries Journal, 2019, vol. 39, issue 13-14, 925-942

Abstract: The purpose of this paper was to measure the short- and long-term impact of innovation announcements on the stock returns of service companies. In order to study the predictors of the abnormal stock returns, the study takes the adoption and diffusion theory as its conceptual background. The research was based on an event study and buy-and-hold methods. It encompassed 398 announcements released for 121 companies in EU member states between February 2011 and December 2016. The study deepens the dialogue on the role of the source of innovation and its advancement stage. It indicates a positive market reaction to high innovation advancement stage announcements in comparison to low advancement stage ones. Furthermore, it suggests a positive market reaction to in-house development in comparison to collaborative development and copying. Finally, the research signals that the innovation advancement stage complements its source by clarifying its relationship with abnormal market value changes.

Date: 2019
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DOI: 10.1080/02642069.2018.1450869

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The Service Industries Journal is currently edited by Eileen Bridges, Professor Domingo Ribeiro, Ronald Goldsmith, Barry Howcroft and Youjae Yi

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