Innovation and Market Value

35 Pages Posted: 14 Apr 1999

See all articles by Bronwyn H. Hall

Bronwyn H. Hall

University of California at Berkeley; National Bureau of Economic Research (NBER); Institute for Fiscal Studies (IFS); Max Planck Institute for Innovation and Competition

Multiple version iconThere are 3 versions of this paper

Date Written: June 1998

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 discussed 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 patent measures contain information about this value above and beyond that conveyed by the usual R&D measure.

JEL Classification: G12, M41, O30

Suggested Citation

Hall, Bronwyn H., Innovation and Market Value (June 1998). Available at SSRN: https://ssrn.com/abstract=151912 or http://dx.doi.org/10.2139/ssrn.151912

Bronwyn H. Hall (Contact Author)

University of California at Berkeley ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

HOME PAGE: http://emlab.berkeley.edu/users/bhhall/index.html

National Bureau of Economic Research (NBER)

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Institute for Fiscal Studies (IFS)

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Max Planck Institute for Innovation and Competition

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Germany

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