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Innovative efficiency and firm value: Evidence from China

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  • Kong, Dongmin
  • Yang, Yiwei
  • Wang, Qin

Abstract

In this paper, we investigate the impact of innovative efficiency on a firm's market valuation based on a sample of Chinese listed firms. We find that innovative efficiency prominently contributes to enhancing a firm's market valuation. We examine the important role of securities analysts and institutional investors in conveying information about innovative efficiency and thus increasing firm value. Empirical results show that high-tech industry and intellectual property protection have a positive moderating effect, and financing constraints have a negative moderating effect. Additionally, we find that portfolio returns with different innovative efficiencies can be priced properly by the market.

Suggested Citation

  • Kong, Dongmin & Yang, Yiwei & Wang, Qin, 2023. "Innovative efficiency and firm value: Evidence from China," Finance Research Letters, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322007334
    DOI: 10.1016/j.frl.2022.103557
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    Cited by:

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    2. Li, Na & Wu, Di, 2024. "Cross-shareholding, financing constraints and firm innovation efficiency," Finance Research Letters, Elsevier, vol. 62(PA).
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    7. Li, Jianjun & Wu, Zhouyi & Yu, Kaijia & Zhao, Wei, 2024. "The effect of industrial robot adoption on firm value: Evidence from China," Finance Research Letters, Elsevier, vol. 60(C).
    8. Qiu, Guojing & Si, Deng-Kui & Hu, Debao & Li, Xinqi, 2023. "Banking deregulation and export product quality," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    9. Shen, Yuanyuan, 2024. "The impact of investor interest protection on corporate innovation efficiency," Finance Research Letters, Elsevier, vol. 62(PA).
    10. Xiao, Zumian & Wang, Shuhan & Zhang, Yepeng & Si, Deng-Kui, 2023. "Power of competition: Unraveling the impact of China's fair competition review system implementation on firm innovation," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1561-1581.
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    More about this item

    Keywords

    Innovative efficiency; Market valuation; Stock returns;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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