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Innovation and market value: a quantile regression analysis

Author

Listed:
  • Alex Coad

    (CES-MATISSE, Univ. Paris 1 and LEM, Sant'Anna School, Pisa)

  • Rekha Rao

    (LEM, Sant'Anna School, Pisa)

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.

Suggested Citation

  • Alex Coad & Rekha Rao, 2006. "Innovation and market value: a quantile regression analysis," Economics Bulletin, AccessEcon, vol. 15(13), pages 1-10.
    • Handle: RePEc:ebl:ecbull:eb-06o10012
    as

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    References listed on IDEAS

    as
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    9. repec:fth:harver:1473 is not listed on IDEAS
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    11. Joao Pedro Azevedo, 2004. "GRQREG: Stata module to graph the coefficients of a quantile regression," Statistical Software Components S437001, Boston College Department of Economics, revised 17 Mar 2011.
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    13. Mahmut Yasar & Carl H. Nelson & Roderick Rejesus, 2006. "Productivity and Exporting Status of Manufacturing Firms: Evidence from Quantile Regressions," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(4), pages 675-694, December.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Innovation;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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