Do innovation-intensive firms mitigate their valuation uncertainty during bad times?

Autor: Ilayda Nemlioglu, Sushanta Mallick
Rok vydání: 2020
Předmět:
Zdroj: Journal of Economic Behavior & Organization. 177:913-940
ISSN: 0167-2681
DOI: 10.1016/j.jebo.2020.06.004
Popis: In times of crisis, innovation and entrepreneurship can be considered as a path out of val- uation uncertainty of firms. All types of innovation output, however, may not have a sim- ilar impact across different firm size and sectors during bad times. Specifically, financially less-constrained (high leverage) innovative firms could be valued higher or experience less uncertainty in their performance. By considering the innovation intensity and leverage in pre- and post-2008 financial crisis periods, and using firm-level quarterly data from listed firms in the UK during 20 0 0–2014, we find that leveraged firms can achieve greater valua- tion and mitigate any valuation uncertainty in the post-crisis period if they are knowledge- or high-technology intensive. In terms of size effect, although leverage distorts market val- uation of large UK firms, the impact is positive for SMEs that are innovation intensive. Finally, in terms of sectoral effect, firms within manufacturing and services with leverage have benefitted from R&D and patenting activities during the post-crisis period, but not in the pre-crisis period. This also gets revealed when we classify all firms into high-tech and low-tech sectors, implying that firms in the high-tech sectors with debt dependence have benefitted favorably in terms of higher valuation and lower uncertainty in the post-crisis period, not firms in the low-technology sectors, reflecting further the role of technological intensity in firm valuation.
Databáze: OpenAIRE
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