Innovation and market value: a quantile regression analysis

Alex Coad () and Rekha Rao-Nicholson

Economics Bulletin, 2006, vol. 15, issue 13, 1-10

Abstract: We construct a new database by matching firm-level Compustat data to NBER patent data, for four 2-digit complex technology sectors. Whilst conventional regression estimators show that the stock market does recognise efforts at innovation, quantile regression analysis adds a new dimension to the literature, suggesting that the influence of innovation on market value varies dramatically across the market value distribution. For firms with a low value of Tobin's q, the stock market will barely recognize their attempts to innovate. For firms with the highest values of Tobin''s q, however, their market value is particularly sensitive to innovative activity.

Keywords: Innovation (search for similar items in EconPapers)
JEL-codes: L2 O1 (search for similar items in EconPapers)
Date: 2006-11-28
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Citations: View citations in EconPapers (56)

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