Innovation capability and post-IPO performance

Re-Jin Guo () and Nan Zhou ()

Review of Quantitative Finance and Accounting, 2016, vol. 46, issue 2, 335-357

Abstract: This paper studies how firms’ innovation capability is related to their stock performance and eventual survival for a sample of biotech IPO firms. We create product-related measures of firms’ innovation capability by tracking the changes in R&D expenses, products, patents, strategic alliances, and product development stages for our sample firms, as disclosed in their IPO prospectuses and third post-IPO 10-K filings. We find that innovation capability is critical to contemporaneous stock performance and eventual firm survival. Biotech IPO firms are more likely to succeed in the long run, if they are able to expand the scale of their research undertakings and make progress in these research activities. Copyright Springer Science+Business Media New York 2016

Keywords: Innovation capability; Intangible assets; Firm survival; Biotech IPO; G24; M41; O33 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (11)

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DOI: 10.1007/s11156-014-0471-3

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