TY - JOUR
T1 - RQ Innovative Efficiency and Firm Value
AU - Cooper, Michael
AU - Knott, Anne Marie
AU - Yang, Wenhao
N1 - Publisher Copyright:
Copyright © The Author(s), 2022. Published by Cambridge University Press on behalf of the Royal College of Psychiatrists.
PY - 2022/8/13
Y1 - 2022/8/13
N2 - We introduce and test a firm-level innovation-efficiency measure new to the finance literature. The measure, termed the research quotient (RQ), defined as the firm-specific output elasticity of research and development (R&D), was first developed in the management literature. RQ has a low correlation with existing innovation input, output, and efficiency measures. We test RQ in a number of innovation tests common to the finance literature and find that RQ is robust in all tests of firm value, even after controlling for previous innovation measures. The results suggest that RQ may serve as a relevant complementary measure of a company's innovation.
AB - We introduce and test a firm-level innovation-efficiency measure new to the finance literature. The measure, termed the research quotient (RQ), defined as the firm-specific output elasticity of research and development (R&D), was first developed in the management literature. RQ has a low correlation with existing innovation input, output, and efficiency measures. We test RQ in a number of innovation tests common to the finance literature and find that RQ is robust in all tests of firm value, even after controlling for previous innovation measures. The results suggest that RQ may serve as a relevant complementary measure of a company's innovation.
UR - http://www.scopus.com/inward/record.url?scp=85110252915&partnerID=8YFLogxK
U2 - 10.1017/S0022109021000417
DO - 10.1017/S0022109021000417
M3 - Article
AN - SCOPUS:85110252915
SN - 0022-1090
VL - 57
SP - 1649
EP - 1694
JO - Journal of Financial and Quantitative Analysis
JF - Journal of Financial and Quantitative Analysis
IS - 5
ER -