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Innovation and Market Value

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  • Bronwyn H. Hall

    (Oxford University, University of California, Berkeley, NBER, and IFS)

Abstract

This paper surveys recent findings about how the financial markets value the knowledge assets of publicly traded firms. The motivation for using market value equation to price knowledge assets is discusssed and the theory behind this equation is briefly presented. Then the empirical literature that relates Tobin's q to R&D and patent measures is surveyed and new results based on U.S. data through 1995 are presented. The conclusion is that the market value of the modern manufacturing corporation is strongly related to its knowledge assets, and that the patent measures contain information about this value above and beyond that conveyed by the usual R&D measure.

Suggested Citation

  • Bronwyn H. Hall, 1999. "Innovation and Market Value," Finance 9902009, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpfi:9902009
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    innovation; intangibles; R&D; patents; market value; patent citations;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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