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Innovation and Market Value in Newly‐Industrialized Countries: The Case of Taiwanese Electronics Firms
Author(s) -
Yang ChihHai,
Chen JongRong
Publication year - 2003
Publication title -
asian economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.345
H-Index - 28
eISSN - 1467-8381
pISSN - 1351-3958
DOI - 10.1111/1467-8381.00168
Subject(s) - stock market , value (mathematics) , commit , economics , panel data , government (linguistics) , market value , stock (firearms) , business , monetary economics , industrial organization , econometrics , finance , philosophy , mechanical engineering , paleontology , linguistics , horse , database , machine learning , computer science , engineering , biology
The relationship between patents, research and development (R&D), and market value in newly industrialized countries is examined for a panel data of Taiwanese electronics firms. Empirical results show that the market value of electronics firms is strongly related to patent count and R&D expenditure in Taiwan. Controlling potential heterogeneity of patents and allowing the value of Tobin's q to vary across firms, the estimated results are quite consistent, which is encouraging for Taiwan's government as it has implemented many policies encouraging firms to commit to R&D. In addition, the significant and positive impact of the sales growth rate might refiect the expectation feature of the stock market.