| Summary: | 碩士 === 東海大學 === 財務金融學系 === 106 === In recent years, corporate innovation capability has become a meaningful indicator of the firms’ future profitability. However, innovation capability may lead to positive or negative effects on stock value. We use the listed companies in Taiwan from 2005 to 2016. To investigate the effects of innovation capability on stock value, we employ intangible assets, R&D expenditure, and the number of patents as the major explanatory variables to proxy for innovation capability. Furthermore, we examine whether the effects vary across different industries or different life cycle stages.
Empirical results show that innovation capability produces different effects on stock value. Due to the higher degree of demand for innovation in the electronic industry, the stock price response to innovation capability is more significant than that of the other industries. However, it appears that investors hold a reserved attitude towards electronic firms’ innovation investment because of the observed negative relation between innovation and stock price. Furthermore, when the firms are in the growth stage, investors may avoid future uncertainties on their investment and hence result in a negative relation between the firm's innovation investment and stock price. In mature stage, firms have improved their management system and owned more resources. The effect of intangible assets on stock price is negative but the R&D expenditure has positive effect on stock price. When the firms in the decline stage, the stock market respond positively to innovation capability. We also find that the number of patents generate a positive effect on stock price across different industries or different life cycle stages.
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