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- Publisher Website: 10.1093/rfs/hhx101
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Article: Innovative originality, profitability, and stock returns
Title | Innovative originality, profitability, and stock returns |
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Authors | |
Issue Date | 2018 |
Publisher | Oxford University Press. The Journal's web site is located at http://rfs.oxfordjournals.org/ |
Citation | The Review of Financial Studies, 2018, v. 31 n. 7, p. 2553-2605 How to Cite? |
Abstract | We propose that innovative originality is a valuable organizational resource and that owing to limited investor attention and skepticism of complexity, greater innovative originality may be undervalued. We find that firms’ innovative originality strongly predicts higher, more persistent, and less volatile profitability and higher abnormal stock returns, findings that are robust to extensive controls. The return predictive power of innovative originality is stronger for firms with higher valuation uncertainty, lower investor attention, and greater sensitivity of future profitability to innovative originality. This evidence suggests that innovative originality acts as a “competitive moat” and is undervalued by the market. |
Persistent Identifier | http://hdl.handle.net/10722/258995 |
ISSN | 2023 Impact Factor: 6.8 2023 SCImago Journal Rankings: 17.654 |
SSRN | |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Hirshleifer, D | - |
dc.contributor.author | Hsu, P | - |
dc.contributor.author | Li, D | - |
dc.date.accessioned | 2018-09-03T03:59:47Z | - |
dc.date.available | 2018-09-03T03:59:47Z | - |
dc.date.issued | 2018 | - |
dc.identifier.citation | The Review of Financial Studies, 2018, v. 31 n. 7, p. 2553-2605 | - |
dc.identifier.issn | 0893-9454 | - |
dc.identifier.uri | http://hdl.handle.net/10722/258995 | - |
dc.description.abstract | We propose that innovative originality is a valuable organizational resource and that owing to limited investor attention and skepticism of complexity, greater innovative originality may be undervalued. We find that firms’ innovative originality strongly predicts higher, more persistent, and less volatile profitability and higher abnormal stock returns, findings that are robust to extensive controls. The return predictive power of innovative originality is stronger for firms with higher valuation uncertainty, lower investor attention, and greater sensitivity of future profitability to innovative originality. This evidence suggests that innovative originality acts as a “competitive moat” and is undervalued by the market. | - |
dc.language | eng | - |
dc.publisher | Oxford University Press. The Journal's web site is located at http://rfs.oxfordjournals.org/ | - |
dc.relation.ispartof | The Review of Financial Studies | - |
dc.rights | Post-print: This is a pre-copy-editing, author-produced PDF of an article accepted for publication in [The Review of Financial Studies] following peer review. The definitive publisher-authenticated version [The Review of Financial Studies, 2018, v. 31 n. 7, p. 2553-2605] is available online at: Oxford [http://dx.doi.org/10.1093/rfs/hhx101]. | - |
dc.title | Innovative originality, profitability, and stock returns | - |
dc.type | Article | - |
dc.identifier.email | Hsu, P: paulhsu@hku.hk | - |
dc.identifier.authority | Hsu, P=rp01553 | - |
dc.description.nature | postprint | - |
dc.identifier.doi | 10.1093/rfs/hhx101 | - |
dc.identifier.scopus | eid_2-s2.0-85044637009 | - |
dc.identifier.hkuros | 289089 | - |
dc.identifier.volume | 31 | - |
dc.identifier.issue | 7 | - |
dc.identifier.spage | 2553 | - |
dc.identifier.epage | 2605 | - |
dc.identifier.isi | WOS:000451283500004 | - |
dc.publisher.place | United Kingdom | - |
dc.identifier.ssrn | 2117516 | - |
dc.identifier.issnl | 0893-9454 | - |