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Conference Paper: Innovation Awards, Product Segmentation, and Stock Returns
Title | Innovation Awards, Product Segmentation, and Stock Returns |
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Authors | |
Issue Date | 2019 |
Publisher | American Economic Association. |
Citation | The Allied Social Science Associations (ASSA) 2019 Meeting, Atlanta, Georgia, USA, 4-6 January 2019 How to Cite? |
Abstract | This paper connects technological innovation to product market segmentation using a prestigious award for technology breakthroughs in product inventions: the R&D 100 Award. We argue that award-winning outcomes have asset pricing implications because awarded firms have the growth opportunities to promote their products to high-end markets, which increases revenue procyclical to aggregate consumption and results in higher systematic risks. We find that, compared with their matched industry counterparts, awarded firms are associated with lower product similarity, lower product fluidity, and higher profitability over the future five years. Moreover, these firms outperform their comparable peers by 3% in annual returns and have both significantly higher procyclicality of sales growth and market betas. Moreover, the award-return relation is more pronounced in periods of higher aggregate consumption growth and among firms with higher R&D investments. |
Description | AFA Ph.D. Student Poster Session |
Persistent Identifier | http://hdl.handle.net/10722/278814 |
DC Field | Value | Language |
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dc.contributor.author | Hsu, P | - |
dc.contributor.author | Yang, Y | - |
dc.contributor.author | Zhou, T | - |
dc.date.accessioned | 2019-10-21T02:14:31Z | - |
dc.date.available | 2019-10-21T02:14:31Z | - |
dc.date.issued | 2019 | - |
dc.identifier.citation | The Allied Social Science Associations (ASSA) 2019 Meeting, Atlanta, Georgia, USA, 4-6 January 2019 | - |
dc.identifier.uri | http://hdl.handle.net/10722/278814 | - |
dc.description | AFA Ph.D. Student Poster Session | - |
dc.description.abstract | This paper connects technological innovation to product market segmentation using a prestigious award for technology breakthroughs in product inventions: the R&D 100 Award. We argue that award-winning outcomes have asset pricing implications because awarded firms have the growth opportunities to promote their products to high-end markets, which increases revenue procyclical to aggregate consumption and results in higher systematic risks. We find that, compared with their matched industry counterparts, awarded firms are associated with lower product similarity, lower product fluidity, and higher profitability over the future five years. Moreover, these firms outperform their comparable peers by 3% in annual returns and have both significantly higher procyclicality of sales growth and market betas. Moreover, the award-return relation is more pronounced in periods of higher aggregate consumption growth and among firms with higher R&D investments. | - |
dc.language | eng | - |
dc.publisher | American Economic Association. | - |
dc.relation.ispartof | 2019 Allied Social Science Association Annual Meeting | - |
dc.rights | 2019 Allied Social Science Association Annual Meeting. Copyright © American Economic Association. | - |
dc.title | Innovation Awards, Product Segmentation, and Stock Returns | - |
dc.type | Conference_Paper | - |
dc.identifier.email | Hsu, P: paulhsu@hku.hk | - |
dc.identifier.authority | Hsu, P=rp01553 | - |
dc.identifier.hkuros | 307593 | - |
dc.publisher.place | United States | - |