Innovation and Price Informativeness

Mathers, Ani Manakyan; Wang, Bin; Wang, Xiaohong Sara

doi:10.1111/fima.12142

Cited by 15 publications

(7 citation statements)

References 90 publications

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“…(2017). The summary statistics of the control variables are generally compatible with previous studies (e.g., Mathers et al., 2017).…”

Section: Empirical Model and Resultssupporting

confidence: 88%

“…Following the literature (e.g., Aghion, Bloom, Blundell, Griffith, & Howitt, 2005; Mathers, Wang, & Wang, 2017), we use patent grants and patent citations to measure innovation outcomes. Our primary data source is the NBER Patent Citation database originally created by Hall, Jaffe, and Trajtenberg (2001).…”

Section: Data and Variable Constructionmentioning

confidence: 99%

“…Due to the positive skew in both patent grants and citations, we use the natural logarithm of one plus the value for both patent variables in our regressions ( LnPatent and LnCitePat ). Consistent with other studies (e.g., Mathers et al., 2017), we measure innovation outcomes three years in the future to account for the length of time required to turn innovation investments into patents.…”

Section: Data and Variable Constructionmentioning

confidence: 99%

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Shareholder coordination and corporate innovation

Mathers

Wang

2020

Business Fin & Account

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We show that greater shareholder coordination, as proxied by the geographic proximity between institutional investors, is positively related to corporate innovation outcomes. This relationship is driven by coordination among dedicated and independent institutions who have strong monitoring incentives and is more pronounced among firms with lower blockholder ownership and greater information asymmetry where there is greater benefit to monitoring. We propose that shareholder coordination promotes corporate innovation through a reduction in managerial agency problems. Overall, our results are consistent with the notion that greater shareholder coordination enables diffuse shareholders to monitor managers more effectively and enhances corporate innovation.

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“…(2017). The summary statistics of the control variables are generally compatible with previous studies (e.g., Mathers et al., 2017).…”

Section: Empirical Model and Resultssupporting

confidence: 88%

Section: Data and Variable Constructionmentioning

confidence: 99%

Section: Data and Variable Constructionmentioning

confidence: 99%

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Shareholder coordination and corporate innovation

Mathers

Wang

2020

Business Fin & Account

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“…Morck et al (2000) compare stock return synchronicity in different countries and posit that when the stock market is efficient, firm‐specific information is quickly incorporated into stock prices, and thus reduces stock price synchronicity and the R 2 . Several empirical findings support this view: firms with lower return synchronicity are found to have a stronger association between current returns and future earnings (Durnev et al 2003), more transparency and lower crash risk (Jin and Myers 2006), more efficient capital allocations (Wurgler 2000; Durnev et al 2004; Chen et al 2007), more open capital markets (Li et al 2004), more innovation outcomes (Mathers et al 2017), closer ties with local institutional investors (Bae et al 2013), faster incorporation of new information into stock prices (Cheng et al 2014), and less excessive control from controlling shareholders (Boubaker et al 2014). In addition, Bris et al (2007) find that when short‐selling is not allowed, the downside return synchronicity (R 2 estimated using negative market returns only) increases because negative firm‐specific information is not incorporated into prices.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 97%

Return Synchronicity and Insider Trading Profitability*

Liang

Tang

2018

Int Rev Finance

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We investigate the association between stock return synchronicity and insider trading profitability. Morck, Yeung and Yu (2000) suggest that greater stock return synchronicity (or R 2) reflects less firm-specific information in stock prices. Consistent with the view, we find significantly higher insider profitability in firms with greater return synchronicity. The results mainly reside in opportunistic trades rather than in routine trades, and are more pronounced for trades by key insiders such as officers and directors. Furthermore, our results are weaker for industry bellwether firms, and stronger for firms with more opaque earnings or lower institutional ownership. We also document significantly more insider purchasing activity in firms with greater return synchronicity. Overall, our results support the view that greater return synchronicity means less firmspecific information in stock prices, and suggest that insiders take advantage of this by trading and profiting more from firms with greater return synchronicity.

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“…14. Other studies use price informativeness as a proxy for private information. See, for example, Roll (1988), Durnev et al (2003) and Mathers et al (2017).…”

Section: Notesmentioning

confidence: 99%

How do institutional investors respond to patent announcements?

Lantushenko

Nelling

2018

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Purpose The purpose of this paper is to examine institutional investor demand for shares of firms that announce patents. Design/methodology/approach There are three important dates in the process of obtaining a patent. First, a patent filer requests the right for intellectual property on the application date. Next, the content of a patent becomes publicly available on the publication date, if authorized by the US Patent and Trademark Office. Third, once the patent is validated, it is issued on the grant date. The authors focus on the publication date, as it marks the time when the patent-specific information is disclosed to public. In a regression framework, the authors analyze how institutional investors respond to patent publications. Findings The authors document a significant increase in institutional demand for a firm’s shares around patent announcements. Institutional investors react more strongly to patent publications announced by firms that have published frequently in the past. The increase in demand is also greater when the firm’s shareholder base consists of a higher percentage of long-term institutions. Institutional trading around patent announcements is associated with higher levels of stock price informativeness. In addition, firms that announce patents exhibit long-term outperformance relative to a control sample. Overall, the results suggest that institutional trading conveys information about the value of patents. Originality/value This study is the first to explore changes in institutional demand around patent publications and to show that such events attract institutional investors and have an impact on shareholder wealth, price informativeness and liquidity.

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Innovation and Price Informativeness

Cited by 15 publications

References 90 publications

Shareholder coordination and corporate innovation

Shareholder coordination and corporate innovation

Return Synchronicity and Insider Trading Profitability*

How do institutional investors respond to patent announcements?

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