Business groups: entry barrier–innovation debate revisited

Mahmood, Ishtiaq P.; Lee, Changyang

doi:10.1016/j.jebo.2002.12.003

Cited by 31 publications

(25 citation statements)

References 27 publications

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“…Scherer (1967) also reveals that technology innovation is nonlinearly associated (in an inverted U-shape) with a firm's size and market concentration ratio. Mahmood and Lee (2004) also suggest that market entry barriers are significantly related to R&D; they further document the relationship between market entry barriers and R&D, which is also nonlinear (like the inverted U-shape).…”

Section: Literature On the Value Relevance Of Randd Investmentmentioning

confidence: 58%

“…Chan et al (1990) also report that the value relevance of technology innovation differs according to R&D intensity. Mahmood and Lee (2004) similarly report that R&D intensity, as a proxy for market competition, is significantly associated with a firm's value. Lee (2005) also reports that the market concentration ratio has negative or inverted U-shape relationship with R&D intensity.…”

Section: Hypothesismentioning

confidence: 96%

“…Much of the accounting, finance, and economics literature has investigated the impact of technology innovation on the market value of equity (Scherer, 1965;Rosenberg, 1976;Kaimen & Schwartz, 1982;Griliches & Mairesse, 1984;Hirschey, 1982;Hirschey & Weygandt, 1985;Bublitz & Entredge, 1989;Chauvin & Hirschey, 1993;Cohen & Klepper, 1994;Kang, 1994;Sougiannis, 1994;Lev & Sougiannis, 1996;Shin, 1999;Vossen, 1999;Kothari, Laguerre & Leone, 2002;Lee & O'Neill, 2003;Mahmood & Lee, 2004;Aghion, 2005;Coombs & Bierly, 2006;Wolf, 2007). Schumpeter (1942) defines technology innovation as the core driver in promoting a firm's value.…”

Section: Literature On the Value Relevance Of Randd Investmentmentioning

confidence: 99%

“…Schumpeter (1942) defines technology innovation as the core driver in promoting a firm's value. Many later papers have shown that technology innovation is significantly associated with the market value of equity and have indicated that R&D can create technology innovation in ways influenced by a firm's size and market competition (Scherer, 1965;Rosenberg, 1976;Kaimen & Schwartz, 1982;Cohen & Klepper, 1994;Kang, 1994;Shin, 1999;Vossen, 1999;Mahmood & Lee, 2004;Aghion, 2005).…”

Section: Literature On the Value Relevance Of Randd Investmentmentioning

confidence: 99%

“…Hypothesis 2: Technology innovation has a nonlinear relationship with the market value of equity as it relates to the debt ratio of small and medium Korean companies Levin (1978), Chan et al (1990), and Mahmood and Lee (2004) report that industry entry barriers such as technology innovation are associated with R&D investment. This research substitutes technology innovation for R&D intensity, measured as the total R&D investment divided by total sales.…”

Section: Hypothesismentioning

confidence: 99%

See 4 more Smart Citations

The Role of R&D Investment in Firm Valuation for Small and Medium Korean Companies

Geejung¹

2014

ASS

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As technology innovation gains attention as a key value-relevant factor, many researchers raise questions about the conventional assumption that the market value of equity is a linear function of technology innovation. This study takes the view that R&D, as a proxy for technology innovation, helps promote firm value in ways dependent on firms' characteristics and market structure. To explore this argument, this study collects data from small and medium companies listed on the Korean stock markets covering from 2001 to 2011. The results show that R&D contributes to the promotion of the market value of equity, which, as a proxy for firm value, is in turn found to be nonlinearly associated with R&D according to a firm's characteristics and market structure. This paper indicates the need to employ a nonlinear value relevance model in assessing the market value of equity as a function of the R&D investments of small and medium Korean companies.

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Section: Literature On the Value Relevance Of Randd Investmentmentioning

confidence: 58%