Innovation and Market Value in Newly‐Industrialized Countries: The Case of Taiwanese Electronics Firms

Chih‐Hai Yang and Jong-Rong Chen ()

Asian Economic Journal, 2003, vol. 17, issue 2, 205-220

Abstract: The relationship between patents, research and development (R&D), and market value in newly industrialized countries is examined for a panel data of Taiwanese electronics firms. Empirical results show that the market value of electronics firms is strongly related to patent count and R&D expenditure in Taiwan. Controlling potential heterogeneity of patents and allowing the value of Tobin's q to vary across firms, the estimated results are quite consistent, which is encouraging for Taiwan's government as it has implemented many policies encouraging firms to commit to R&D. In addition, the significant and positive impact of the sales growth rate might refiect the expectation feature of the stock market.

Date: 2003
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