Short- and Long-Term Effects of Innovations on Enterprise Market Value

Innovations seem crucial for contemporary enterprises willing to achieve the objective of increasing firm's value. The aim of this paper is to examine, both conceptually and empirically, the relationship between innovations and tourism enterprises' market value. Tourism sector was taken into consideration in order to fulfill the existing research gap. This focused paper was based on relevant market data. Event study and calendar time portfolio approaches were chosen to test investors' responses to innovation announcements. Six tourism companies listed on the Main Market of Warsaw Stock Exchange were examined within the six years research period and 34 innovation announcements were identified. Polish Press Agency database and Warsaw Stock Exchange databases were used to collect data. Results indicate that innovations affected positively investors' valuation of tourism enterprises. The average event day market value change equaled 0.63% and differed considerably from the one-year one of 3.02% meaning that investors adjust their initial reaction over time. Initially investors reacted mostly to marketing, distributional and external relations innovations while within one-year period they attributed the most value to marketing and external relations ones