Innovative Originality, Profitability, and Stock Returns

• 成果类型: Article
• 署名作者: Hirshleifer, David; Hsu, Po-Hsuan; Li, Dongmei
• 署名单位: University of California System; University of California Irvine; National Bureau of Economic Research; University of Hong Kong; University of South Carolina System; University of South Carolina Columbia
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhx101
• 发表日期: 2018
• 页码: 2553
• 关键词: research-and-development; INFORMATION-TECHNOLOGY REVOLUTION; cross-section; development investment; institutional investors; financial constraints; operating performance; VALUE-RELEVANCE; MARKET; RISK

摘要

We propose that innovative originality is a valuable organizational resource and that owing to limited investor attention and skepticism of complexity, greater innovative originality may be undervalued. We find that firms' innovative originality strongly predicts higher, more persistent, and less volatile profitability and higher abnormal stock returns, findings that are robust to extensive controls. The return predictive power of innovative originality is stronger for firms with higher valuation uncertainty, lower investor attention, and greater sensitivity of future profitability to innovative originality. This evidence suggests that innovative originality acts as a competitive moat and is undervalued by the market.