Firm value and investment in R&D
Article Abstract:
The theory that the stock market reacts positively to reports of significant spending on research and development by firms was studied. It was posited that the stock market reacts favorably because of the profitability of investments in research. The data analyzed were taken from the Compustat tape Canadian file and related to marketequity value, year-end share prices, number of shares and expenditures on research and development activities of Canadian firms. It was concluded that was a positive correlation between research expenditures and market value.
Publication Name: Managerial & Decision Economics
Subject: Economics
ISSN: 0143-6570
Year: 1993
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More on Knight and the theory of the firm
Article Abstract:
In contrast to the statements of Boudreaux and Holcombe, many contemporary theorists of the firm believe in an open-ended system dependent upon a varying pool of knowledge. They closely resemble Frank Knight's theories of the firm as an open universe, to which they are unfavorably compared, and indeed are based on his work. Knight, as do his present followers, stressed entrepreneurs rather than managers as the innovative force in business.
Publication Name: Managerial & Decision Economics
Subject: Economics
ISSN: 0143-6570
Year: 1993
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Market structure and the value of growth
Article Abstract:
A model was used to assess factors affecting the current market value of firms and how company growth is tied in with current market value. Previous studies have shown that an increase in firm size does not result in a corresponding increase in the value of growth. Evidence suggests that growth induced by advertising and R&D are more effective than growth in general at building a firm's market value.
Publication Name: Managerial & Decision Economics
Subject: Economics
ISSN: 0143-6570
Year: 1997
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