How do financial markets respond to firms' efforts at innovation ? To answer this question, we measure innovation by creating a synthetic indicator based on a firm's recent history of R&D expenditure and patent applications. We focus on four 2-digit «complex technology» manufacturing sectors...

Innovation is commonly seen as the principal engine of economic development. In this paper, we investigate the microfoundations of economic growth by relating innovation to sales growth at the firm-level, for incumbent firms in four «complex technology» sectors. The average firm, which...

We construct a new database by matching firm-level Compustat data to NBER patent data, for four 2-digit complex technology sectors. Whilst conventional regression estimators show that the stock market does recognise efforts at innovation, quantile regression analysis adds a new dimension to the...