|Author:||Chen, I Ming|
|Title:||Can R&D spillover effect explain the positive association between R&D investments and future abnormal returns ?|
|Advisors:||Jiang, Li (LMS)|
|Subject:||Hong Kong Polytechnic University -- Dissertations|
Technological innovations -- Economic aspects
Research, Industrial -- Economic aspects
|Department:||Faculty of Business|
|Pages:||iv, 96 pages : color illustrations|
|Abstract:||This study examines whether R&D spillover effect can provide an alternative explanation on the positive association between R&D investments and future abnormal returns. I find that R&D investments of peer firms positively affect a firm's stock returns, and such R&D spillover effect is inversely related to geographical proximity and is positively related to the firm's own absorptive capability. In particular, using geographic distance as a key determinant of R&D spillover potential, I find no significant effect of such incoming R&D spillover potential on stock returns on its own. However, I find an incremental positive effect of the interaction between incoming R&D spillover potential and a firm's R&D investments as a proxy for absorptive capability. My evidence suggests that a firm's R&D investments enhance its absorptive capability in benefiting from peer firms' R&D investments. My study contributes to the literature on R&D premium by providing a new perspective on the importance of peer firms' R&D investments.|
|Rights:||All rights reserved|
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