Innovative Efficiency and Stock Returns

Hirshleifer, David; Hsu, Po–Hsuan; Li, Dongmei

doi:10.2139/ssrn.1799675

Cited by 150 publications

(241 citation statements)

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“…To control for own firm innovation effect on cash holdings, following the literature of firm innovations (e.g., Fang, Tian and Tice, 2013;Hsu, 2013;and He and Tian, 2013), we measure a firm's innovation using the number of patents filed and the average number of citations the firm's patents receive in subsequent years. The number of patents captures a firm's overall innovation productivity and the number of citations per patent captures the significance and quality of its innovation output.…”

Section: Own-firm Innovationmentioning

confidence: 99%

“…7 Our empirical results complement HPP's findings by showing that an important dimension of product market threats, rivalry induced by competitors' R&D efforts, has a significant effect on cashing holdings. Third, recent studies have presented evidence that corporate innovations play an important role in equity market and corporate mergers and acquisitions (e.g., Hsu, 2009;Hirshleifer et al, 2013;Bena and Li, 2013;Fresard, Hoberg and Phillips, 2013). However, the role of firm-level R&D spillovers in determining corporate financial decisions has received insufficient attention.…”

Section: Introductionmentioning

confidence: 99%

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Technology spillovers and corporate cash holdings

Qiu

Wan

2015

Journal of Financial Economics

127

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This study examines the effect of technology spillovers on firms' cash holdings. It finds that firms facing greater technology spillovers hold higher cash balances. This effect is more pronounced among financially constrained firms and for firms that are likely to benefit more from diffused technology, e.g., those have newer patents, are more profitable, face better growth opportunities and are associated with greater product market fluidity. The spillover impact remains strong when product market competition and own-firm innovations are accounted for. Overall, our study identifies technology spillovers as an important factor in determining corporate cash policy.Keywords: technology spillovers, product market competition, cash holdings JEL Classifications: G32, G35, L10 1 Qiu is from McMaster University. Wan is from University of Massachusetts Boston. We are grateful for the comments by Gerard Hoberg and Kai Li. We thank an anonymous referee for constructive comments. Qiu acknowledges financial support from the Social Science and Humanity Research Commission. Technology Spillovers and Corporate Cash Holdings AbstractThis study examines the effect of technology spillovers on firms' cash holdings. It finds that firms facing greater technology spillovers hold higher cash balances. This effect is more pronounced among financially constrained firms and for firms that are likely to benefit more from diffused technology, e.g., those have newer patents, are more profitable, face better growth opportunities and are associated with greater product market fluidity. The spillover impact remains strong when product market competition and own-firm innovations are accounted for. Overall, our study identifies technology spillovers as an important factor in determining corporate cash policy.

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Section: Own-firm Innovationmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Technology spillovers and corporate cash holdings

Qiu

Wan

2015

Journal of Financial Economics

127

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“…In particular, we use export performance rather than other export competitiveness indexes based on Costantini and Crespi [25], Jha [10], Sung and Song [23], and Sung [12], which show that export performance is significantly affected by public policy. We also set up dynamic models following Hirshleifer and coworkers' [64] argument that it takes time for a firm's performance growth to become evident following the enhancement of eco-efficiency. In addition, we adopt the view that path dependence processes (i.e., dynamic effects) include interactions among export performance, eco-efficiency, and GDP based on Sung [23], implying that most panel data are heterogeneous and non-stationary co-integrated.…”

Section: Theoretical Background and Research Methodologymentioning

confidence: 99%

Eco-Efficiency of Government Policy and Exports in the Bioenergy Technology Market

2017

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This study investigates how the eco-efficiency of government policy-continuously implementing innovation-friendly policy based on both environmental and economic considerations-affects the export performance of bioenergy technologies, using panel data from 16 countries during 1995-2012. Various heterogeneous panel framework tests are conducted. Our panel unit root and co-integration tests, which allow for cross-sectional dependence in the panel, show that the time series data on the eco-efficiency of public support, exports, and gross domestic product (GDP) are integrated and co-integrated. We set up a panel vector error correction model (VECM) to empirically test the casual relationship among the variables examined. The long-term parameters of the variables were calculated using dynamic ordinary lease squares (DOLS). Panel difference generalized method of moments (GMM) estimations were conducted to test the short-term relationship among the variables. The results of this study therefore show that the eco-efficiency of government policy positively influences export performance in the long run, but not in the short run. The presented findings also indicate that efficiently implemented government policy plays a crucial role in achieving environmentally sound and sustainable development, showing path dependence among the eco-efficiency of government policy, exports, and GDP. We finally suggest policy implications based on the results.

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“…Empirical evidence even suggests that low skill investors underweight information that is hard to process (e.g., Engelberg, Reed, and Ringgenberg (2012), Hirshleifer, Hsu, and Li (2013)). However, in the case of venture capitalists, Gompers et al (2016) document that qualitative factors are more important for investment decisions than the project's valuation.…”

Section: "The Key To Investing Is Not Assessing How Much An Industry mentioning

confidence: 99%

Market Power in the Portfolio: Product Market Competition and Mutual Fund Performance

Jaspersen

2016

SSRN Journal

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Innovative Efficiency and Stock Returns

Cited by 150 publications

References 0 publications

Technology spillovers and corporate cash holdings

Technology spillovers and corporate cash holdings

Eco-Efficiency of Government Policy and Exports in the Bioenergy Technology Market

Market Power in the Portfolio: Product Market Competition and Mutual Fund Performance

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