R&D innovation indicator and its effects on the market. An empirical assessment from a financial perspective

Coluccia, D., Dabić, M. ORCID: 0000-0001-8374-9719, Del Giudice, M., Fontana, S. and Solimene, S., 2019. R&D innovation indicator and its effects on the market. An empirical assessment from a financial perspective. Journal of Business Research. ISSN 0148-2963

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Abstract

We propose an alternative firm-level measure for innovation activities—R&D elasticity—and we analyse its effects on the Tobin's Q of listed companies on the Euronext 100 Index. We find that R&D elasticity is positively related to market appreciation by stakeholder investors. Moreover, we analyse the role of default risk in the relationship between innovation activities and market value, and find that firms' default probabilities are negatively related to Tobin's Q. These findings are supported by OLS regressions, wherein Tobin's Q is regressed on R&D elasticity, five-year default probability, and controls such as ESG voluntary disclosure. These results further the research aimed at developing a conceptual framework for integrating at a policy level the R&D elasticity indicator as a type of innovation disclosure among the non-financial disclosures released by companies.

Item Type: Journal article
Publication Title: Journal of Business Research
Creators: Coluccia, D., Dabić, M., Del Giudice, M., Fontana, S. and Solimene, S.
Publisher: Elsevier
Date: 23 April 2019
ISSN: 0148-2963
Identifiers:
NumberType
10.1016/j.jbusres.2019.04.015DOI
S0148296319302577Publisher Item Identifier
Divisions: Schools > Nottingham Business School
Depositing User: Jonathan Gallacher
Date Added: 29 May 2019 08:36
Last Modified: 29 May 2019 08:38
URI: http://irep.ntu.ac.uk/id/eprint/36665

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