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Intangible Assests and Market Value: Evidence from Biotechnology Firms

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  • Lionel Nesta

    ()
    (SPRU, University of Sussex)

  • Pier-Paolo Saviotti

    (Institut National de la Recherche Agronomique, University Pierre Mend├Ęs)

Abstract

We examine the relationship between the characteristics of the firms' knowledge base in terms of knowledge capital and knowledge integration and the stock market value of 99 firms active in biotechnology during the nineties. Panel data regression models show that our measure of knowledge integration better explains the variance of a firm's market value than the more conventional variable of knowledge capital. This econometric relationship becomes stronger as the technology cycle reaches more mature phases. Meanwhile, profitable and research-intensive firms reach higher levels of market value.

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File URL: http://www.sussex.ac.uk/Units/spru/publications/imprint/sewps/sewp87/sewp87.pdf
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Bibliographic Info

Paper provided by SPRU - Science and Technology Policy Research, University of Sussex in its series SPRU Working Paper Series with number 87.

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Length: 28 pages
Date of creation: 01 Jun 2003
Date of revision:
Handle: RePEc:sru:ssewps:87

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Related research

Keywords: Knowledge integration; intangible assets; market value; biotechnology; GMM.;

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References

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  1. Hall, Bronwyn H. & Jaffee, Adam & Trajtenberg, Manuel, 2000. "Market Value and Patent Citations: A First Look," Department of Economics, Working Paper Series qt1rh8k6z2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  2. Breschi, Stefano & Lissoni, Francesco & Malerba, Franco, 2003. "Knowledge-relatedness in firm technological diversification," Research Policy, Elsevier, vol. 32(1), pages 69-87, January.
  3. Robert E. Hall, 2000. "The stock market and capital accumulation," Proceedings, Federal Reserve Bank of San Francisco, issue Apr.
  4. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
  5. Connolly, Robert A. & Hirschey, Mark, 1988. "Market value and patents : A Bayesian approach," Economics Letters, Elsevier, vol. 27(1), pages 83-87.
  6. Iain Cockburn & Zvi Griliches, 1987. "Industry Effects and Appropriability Measures in the Stock Markets Valuation of R&D and Patents," NBER Working Papers 2465, National Bureau of Economic Research, Inc.
  7. Lionel Nesta & Pier Paolo Saviotti, 2005. "COHERENCE OF THE KNOWLEDGE BASE AND THE FIRM'S INNOVATIVE PERFORMANCE: EVIDENCE FROM THE U.S. PHARMACEUTICAL INDUSTRY -super-* ," Journal of Industrial Economics, Wiley Blackwell, vol. 53(1), pages 123-142, 03.
  8. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
  9. Teece, David J. & Rumelt, Richard & Dosi, Giovanni & Winter, Sidney, 1994. "Understanding corporate coherence : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 1-30, January.
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  11. Scott, John T & Pascoe, George, 1987. "Purposive Diversification of R and D in Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 36(2), pages 193-205, December.
  12. Pakes, Ariel, 1985. "On Patents, R & D, and the Stock Market Rate of Return," Scholarly Articles 3436409, Harvard University Department of Economics.
  13. Scott,John T., 2005. "Purposive Diversification and Economic Performance," Cambridge Books, Cambridge University Press, number 9780521022583, October.
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Cited by:
  1. Tietze, Frank & Granstrand, Ove & Herstatt, Cornelius, 2006. "Towards advanced Intellectual property management - Events and stages during the development. Evidence from the biotech sector," Working Papers 35, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.

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