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The stock market and innovation : Does the stock market attract, select and boost innovation?

This paper explores the stock market as a source of funding for innovation by looking at the ability of the stock market to attract, identify and channel funds to innovative firms. We analysed 541 IPOs on the Swedish stock market between the years 2000-2015, using patent applications as a proxy for innovation. Results from an event study and regressions using two control groups show that firms find the stock market an attractive source of funding for innovation and that going public helps firms overcome liquidity restraints. By looking at the long- and short-term performance, measured by stock prices, of innovative firms by conducting OLS regressions, our results suggest; one, that there is an initial demand for innovative companies undergoing an IPO in comparison to non-innovative firms. And two, that investors are able to predict future innovativeness to some extent, but that they have some difficulties in anticipating future performance of innovative firms.

Identiferoai:union.ndltd.org:UPSALLA1/oai:DiVA.org:uu-448144
Date January 2021
CreatorsLidgren, Becky, Myrsten, Frida
PublisherUppsala universitet, Företagsekonomiska institutionen
Source SetsDiVA Archive at Upsalla University
LanguageEnglish
Detected LanguageEnglish
TypeStudent thesis, info:eu-repo/semantics/bachelorThesis, text
Formatapplication/pdf
Rightsinfo:eu-repo/semantics/openAccess

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