R&D innovation indicator and its effects on the market. An empirical assessment from a financial perspective
Daniela Coluccia, Marina Dabić, Manlio Del Giudice, Stefano Fontana, Silvia Solimene - We propose an alternative firm-level measure for innovation activities—R&D elasticity—and we analyse its effects on the Tobin's Q of listed companies on the Euronext 100 Index. We find that R&D elasticity is positively related to market appreciation by stakeholder investors. Moreover, we analyse the role of default risk in the relationship between innovation activities and market value, and find that firms' default probabilities are negatively related to Tobin's Q.