This paper introduces Schumpeter's idea of creative destruction into asset pricing. The key point of our model is that small and value firms are more likely destroyed during technological revolutions, resulting into higher expected returns for these stocks. A two-factor model including market...

We relate Schumpeter's notion of creative destruction to asset pricing, thereby offering a novel explanation of size and value premia. We argue that small-value firms are more likely to be destroyed by serendipitous invention activity, and investors demand higher expected returns for bearing...

This study explores the characteristics and determinants of innovation of exceptionally innovative small and medium sized UK enterprises. The focus is placed on 'serial' innovators, defined as independent companies with a persistent unusually high frequency of innovations over time. The aim of...