• The impact of R&D in firm value across Europe
  • L'impatto della ricerca e sviluppo sul valore delle imprese in Europa
  • Duqi, Andi <1980>


  • SECS-P/11 Economia degli intermediari finanziari


  • In this thesis the impact of R&D expenditures on firm market value and stock returns is examined. This is performed in a sample of European listed firms for the period 2000-2009. I apply different linear and GMM econometric estimations for testing the impact of R&D on market prices and construct country portfolios based on firms’ R&D expenditure to market capitalization ratio for studying the effect of R&D on stock returns. The results confirm that more innovative firms have a better market valuation,investors consider R&D as an asset that produces long-term benefits for corporations. The impact of R&D on firm value differs across countries. It is significantly modulated by the financial and legal environment where firms operate. Other firm and industry characteristics seem to play a determinant role when investors value R&D. First, only larger firms with lower financial leverage that operate in highly innovative sectors decide to disclose their R&D investment. Second, the markets assign a premium to small firms, which operate in hi-tech sectors compared to larger enterprises for low-tech industries. On the other hand, I provide empirical evidence indicating that generally highly R&D-intensive firms may enhance mispricing problems related to firm valuation. As R&D contributes to the estimation of future stock returns, portfolios that comprise high R&D-intensive stocks may earn significant excess returns compared to the less innovative after controlling for size and book-to-market risk. Further, the most innovative firms are generally more risky in terms of stock volatility but not systematically more risky than low-tech firms. Firms that operate in Continental Europe suffer more mispricing compared to Anglo-Saxon peers but the former are less volatile, other things being equal. The sectors where firms operate are determinant even for the impact of R&D on stock returns; this effect is much stronger in hi-tech industries.


  • 2012-04-20


  • Doctoral Thesis
  • PeerReviewed


  • application/pdf



Duqi, Andi (2012) L'impatto della ricerca e sviluppo sul valore delle imprese in Europa, [Dissertation thesis], Alma Mater Studiorum UniversitĂ  di Bologna. Dottorato di ricerca in Mercati e intermediari finanziari , 24 Ciclo. DOI 10.6092/unibo/amsdottorato/4468.