Stock Returns and Geographic Innovation Index

24 Pages Posted: 21 May 2008

See all articles by Vigdis Boasson

Vigdis Boasson

Central Michigan University; Central Michigan University

Emil Boasson

Central Michigan University

Alan MacPherson

State University of New York

Date Written: 2008

Abstract

Using surveys, on-site interviews of approximately 225 publicly-traded pharmaceutical firms in the United States, and a matching dataset with 42,849 observations of pharmaceutical patent citations, we combine both quantitative and qualitative research methods to investigate the relations between geographic proximity to innovation resources and stock returns. We develop a geographic innovation index to capture the key geographic factors that might have a positive impact on the firm's knowledge creation. We then examine the stock investment performance in terms of risk-adjusted returns for companies that have greater proximity to geographic innovation resources versus those companies that have less proximity to geographic innovation resources. We find that investments in companies with greater proximity to geographic innovation resources tend to achieve better risk-adjusted returns in the stock markets.

Suggested Citation

Boasson, Vigdis and Boasson, Emil and MacPherson, Alan, Stock Returns and Geographic Innovation Index (2008). 2008 Industry Studies Conference Paper, Available at SSRN: https://ssrn.com/abstract=1135648 or http://dx.doi.org/10.2139/ssrn.1135648

Vigdis Boasson (Contact Author)

Central Michigan University ( email )

Mount Pleasant, MI 48859
United States

Central Michigan University ( email )

Department of Finance and Law, College of Business
Central Michigan University
Mt. Pleasant, MI 48858

Emil Boasson

Central Michigan University ( email )

Mt. Pleasant, MI 48858
United States

Alan MacPherson

State University of New York ( email )

12 Capen Hall
Buffalo, NY 14260
United States

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