Bubbles and the value of innovation

• 成果类型: Article
• 署名作者: Haddad, Valentin; Ho, Paul; Loualiche, Erik
• 署名单位: University of California System; University of California Los Angeles; Federal Reserve System - USA; Federal Reserve Bank - Richmond; University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2022.04.006
• 发表日期: 2022
• 页码: 69-84
• 关键词: Bubbles; INNOVATION; DISAGREEMENT; speculation

摘要

Booming innovation often coincides with intense speculation in financial markets. Using over a million patents, we document two ways the market valuation of innovation and its economic impact become disconnected during bubbles. Specifically, an innovation raises the stock price of its creator by 40% more than is justified by future outcomes. In contrast, competitors' stock prices move little despite their profits suffering. We develop a theory of investor disagreement about which firms will succeed that reconciles both the facts, unlike existing models of bubbles. Optimal innovation policy during bubbles must account for the disconnect. (c) 2022 Elsevier B.V. All rights reserved.