How Do Firm Characteristics Influence the Relationship between R&D and Firm Value?
[EN] This paper focuses on how a firm’s characteristics affect the market valuation of its research anddevelopment (R&D) spending. We derive a valuation model based on the capital market arbitragecondition. Using the generalized method of moments and data from the Eurozone countries toestimate t...
| Autores: | , , |
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| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2010 |
| País: | España |
| Institución: | Universidad de Salamanca (USAL) |
| Repositorio: | GREDOS. Repositorio Institucional de la Universidad de Salamanca |
| OAI Identifier: | oai:gredos.usal.es:10366/149748 |
| Acceso en línea: | http://hdl.handle.net/10366/149748 |
| Access Level: | acceso abierto |
| Palabra clave: | Research and development Andmarket share Firm growth Financial system 5312.10 Investigación y desarrollo 5311 Organización y Dirección de Empresas |
| Sumario: | [EN] This paper focuses on how a firm’s characteristics affect the market valuation of its research anddevelopment (R&D) spending. We derive a valuation model based on the capital market arbitragecondition. Using the generalized method of moments and data from the Eurozone countries toestimate this model yields interesting results. Several firm characteristics (size, firm growth, andmarket share) positively affect the relationship between firm value and R&D spending, whileothers (free cash flow, dependence on external finance, labor intensity, and capital intensity) exerta negative effect. Therefore, we conclude that the effectiveness of R&D spending depends on firmcharacteristics. |
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