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Market value of R&D, patents, and organizational capital: Finnish evidence

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  • Jaana Rahko

Abstract

This paper studies how knowledge and organizational capital (OC) affect the market valuation of firms. Detailed occupational information from Finnish linked employer-employee data is used to form new estimates of firms' organizational investments. The market value of OC is analyzed together with research and development (R&D) and patent variables. A nonlinear least-squares regression is used to investigate the contribution of these variables to the market value of Finnish firms during the period 1995-2008. The results show that OC, R&D, patents, and patent citations all have positive and significant effects on market value. A particularly interesting finding is that the effect of OC appears to be even stronger than the effect of R&D investments. This study also provides internationally comparable results on the market valuation of knowledge assets that indicate that in Finland, the market valuation of R&D, but not patents, is lower than in the USA and many European countries.

Suggested Citation

  • Jaana Rahko, 2014. "Market value of R&D, patents, and organizational capital: Finnish evidence," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(4), pages 353-377, June.
    • Handle: RePEc:taf:ecinnt:v:23:y:2014:i:4:p:353-377
    DOI: 10.1080/10438599.2013.864923
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    References listed on IDEAS

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    1. Bronwyn H. Hall & Grid Thoma & Salvatore Torrisi, 2006. "The market value of patents and R&D: Evidence from European firms," KITeS Working Papers 186, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Nov 2006.
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    Cited by:

    1. David Anderson & John Tressler, 2018. "The Impact of Citation Timing: A Framework and Examples," Review of Economics and Institutions, Università di Perugia, vol. 9(2).
    2. Igna, Ioana & Venturini, Francesco, 2023. "The determinants of AI innovation across European firms," Research Policy, Elsevier, vol. 52(2).
    3. Alessandra Colombelli & Jackie Krafft & Francesco Quatraro, 2015. "Eco-innovation and firm growth: Do green gazelles run faster? Microeconometric evidence from a sample of European firms," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201516, University of Turin.
    4. Andersson, David E. & Ekman, Anton & Huila, Anton & Tell, Fredrik, 2023. "Industrial design rights and the market value of firms," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    5. Antonelli, Cristiano & Crespi, Francesco & Quatraro, Francesco, 2022. "Knowledge complexity and the mechanisms of knowledge generation and exploitation: The European evidence," Research Policy, Elsevier, vol. 51(8).
    6. Alessandra Colombelli & Jackie Krafft & Francesco Quatraro, 2015. "Eco-innovation and Firm Growth: Do Green Gazelles Run Faster? Microeconometric Evidence from a Sample of European Firms. WWWforEurope Working Paper No. 88," WIFO Studies, WIFO, number 57897.
    7. Neuhäusler , Peter & Schubert, Torben & Frietsch , Rainer & Blind , Knut, 2015. "Managing Portfolio Risk in Strategic Technology Management: Evidence from a Panel Data Set of the World’s Largest R&D Performers," Papers in Innovation Studies 2015/41, Lund University, CIRCLE - Centre for Innovation Research.
    8. Hannu Piekkola, 2016. "Intangible Investment and Market Valuation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(1), pages 28-51, March.

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