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Innovation and Stock Prices: a Review of some Recent Work

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  • Mariana Mazzucato

Abstract

The paper reviews work which draws a link between the dynamics of innovation and the dynamics of stock prices. One of the key findings is the relationship between innovation intensity (e.g. radical innovation) and the volatility of firm level stock returns. By connecting the analysis of risk and uncertainty? often related in the finance literature to ?animal spirits? and other stochastic factors? to changes in real production conditions at the firm and industry level, the paper provides the foundation for a Schumpeterian analysis of time varying risk. JEL Classification: G12, 030.

Suggested Citation

  • Mariana Mazzucato, 2006. "Innovation and Stock Prices: a Review of some Recent Work," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 159-179.
    • Handle: RePEc:cai:reofsp:reof_073_0159
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    References listed on IDEAS

    as
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    21. Mariana Mazzucato, 2002. "The PC Industry: New Economy or Early Life-Cycle?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 318-345, April.
    22. Shiller, Robert J, 1981. "Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?," American Economic Review, American Economic Association, vol. 71(3), pages 421-436, June.
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    27. Wesley M. Cohen & Richard C. Levin & David C. Mowery, 1987. "Firm Size and R&D Intensity: A Re-Examination," NBER Working Papers 2205, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Daniela Grieco, 2018. "Innovation and stock market performance: A model with ambiguity-averse agents," Journal of Evolutionary Economics, Springer, vol. 28(2), pages 287-303, April.
    2. Nawrocki Tomasz L., 2019. "The Use of Fuzzy Logic in Corporate Innovative Potential Assessment," Econometrics. Advances in Applied Data Analysis, Sciendo, vol. 23(1), pages 29-44, March.
    3. BokHyun Lee, 2018. "The Relationship between Technology Life Cycle and Korean Stock Market Performance," IJFS, MDPI, vol. 6(4), pages 1-22, October.
    4. Nawrocki Tomasz L., 2019. "The Use of Fuzzy Logic in Corporate Innovative Potential Assessment," Econometrics. Advances in Applied Data Analysis, Sciendo, vol. 23(1), pages 29-44, March.

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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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