Technological links and predictable returns

Lee, Charles M.C.; Sun, Stephen Teng; Wang, Rongfei; Zhang, Ran

doi:10.1016/j.jfineco.2018.11.008

Cited by 147 publications

(48 citation statements)

References 69 publications

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“…Following Lee et al (2017), we exclude financial stocks from the analysis and assume that the patent data becomes publicly available six months after the end of the year in which the patent is granted. The patent data is available through 2010 so the sample for tests including technology linked variables ends in 2012:06.…”

Section: Datamentioning

confidence: 99%

“…Related to the notion of industry relatedness is technological relatedness. In a very recent paper, Lee et al (2017) find return predictability across technology-linked firms.…”

Section: Introductionmentioning

confidence: 97%

“…where Ti = (s1, s2, …, sk, …, s427) is a vector of the firm's patent activity and the k th element, sk, is the average share of the firm's patents in technology class k out of the firm's total number of patents granted over the rolling past five years (Lee et al 2017).…”

mentioning

confidence: 99%

See 2 more Smart Citations

Shared analyst coverage: Unifying momentum spillover effects

Ali¹,

Hirshleifer

2020

Journal of Financial Economics

155

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Section: Datamentioning

confidence: 99%

“…Related to the notion of industry relatedness is technological relatedness. In a very recent paper, Lee et al (2017) find return predictability across technology-linked firms.…”

Section: Introductionmentioning

confidence: 97%

See 1 more Smart Citation

Shared analyst coverage: Unifying momentum spillover effects

Ali¹,

Hirshleifer

2020

Journal of Financial Economics

155

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“…The knowledge-based view of the firm advocates that a firm’s knowledge assets are the most critical source of a firm’s value creation, heterogeneity, competitive advantage and long-run success (Barney, 1991; Wang et al , 2017; Kogut and Zander, 1996; Kogut and Zander, 1992; Lee et al , 2019; Ramani, 2002; Martín‐de Castro et al , 2011). A firm’s knowledge assets are often divided into two categories – general and specific – according to the degree to which the knowledge is specific to a firm’s unique features (Wang et al , 2016a).…”

Section: Theory and Hypotheses Developmentmentioning

confidence: 99%

Minding the gap: the effect of CEO underpayment on firm-specific knowledge

Wang

Chu

2020

JKM

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Purpose This study aims to build on equity theory to assess the effect of chief executive officer (CEO) underpayment on the accumulation of firm-specific knowledge, accounting for the moderating effects of the CEO compensation gap and the clarity of the board’s informal hierarchy. Design/methodology/approach This study starts with all firms listed in the Execucomp database for the period 1992 to 2006. Then, all data sources are merged and entries with missing information are excluded. The final data set used for model estimations includes 1,152 firm-year observations. The command xtreg in Stata 12 with the fixed-effect option (fe) is used to estimate the relationship between CEO underpayment and firm-specific knowledge. Findings This study proposed and examined the role of CEO underpayment in discouraging CEO willingness to invest firm-specific human capital and, accordingly, to adopt a strategy of accumulating lower levels of firm-specific knowledge assets. The empirical analyses strongly support this argument. Moreover, CEO compensation gaps and the informal hierarchy of boards negatively moderated this relationship. That is, CEO underpayment had a weaker negative effect on firm-specific knowledge when the CEO compensation gap and the clarity of the board’s informal hierarchy were high. Originality/value Prior studies from the knowledge-based perspective have focused on the importance of firm-specific knowledge in enabling a firm to achieve superior financial performance. However, relatively little attention has been paid to CEOs’ willingness to accumulate firm-specific knowledge. The present study contributes to the knowledge-based view of the firm. This study integrates equity theory with the knowledge-based view of the firm by highlighting how unfair compensation of CEOs may discourage them to fully realize a firm’s potential to generate specific knowledge. By incorporating the fairness issue of CEO compensation into the knowledge-based view, this study contributes to a deeper understanding of the origins of firm-specific knowledge.

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“…Extant literature has studied the spillover effects within industries, along the supply chain, and within geo-economic locations. A related paper we are aware of is Lee et al (2019) who find that technology links have significant asset pricing implications. We contribute to the "spillover" literature by showing that the information diffusion between the M&A market and technology space constitutes an important channel of information aggregation.…”

Section: Introductionmentioning

confidence: 99%

Acquisitions and Technology Value Revision

et al. 2019

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Acquisition announcements cause upward revisions in the market value of target firms' technology peers, whether targets and their peers belong to the same industry or not. Firms having deeper technology overlaps with the targets experience more dramatic price revisions. Consistent with the acquisition probability theory, a firm is more likely to be taken over if at least one of its technology peers has been acquired recently; and peers more vulnerable to acquisitions have greater upward price revisions. Our findings demonstrate that information diffusion along the technology links is essential for technology valuation.

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Technological links and predictable returns

Cited by 147 publications

References 69 publications

Shared analyst coverage: Unifying momentum spillover effects

Shared analyst coverage: Unifying momentum spillover effects

Minding the gap: the effect of CEO underpayment on firm-specific knowledge

Acquisitions and Technology Value Revision

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