TY  - JOUR
AU  - Hall,Bronwyn H.
AU  - Oriani,Raffaele
TI  - Does the Market Value R&D Investment by European Firms? Evidence from a Panel of Manufacturing Firms in France, Germany, and Italy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10408
PY  - 2004
Y2  - April 2004
UR  - http://www.nber.org/papers/w10408
L1  - http://www.nber.org/papers/w10408.pdf
N1  - Author contact info:
Bronwyn H. Hall
Dept. of Economics
549 Evans Hall
UC Berkeley
Berkeley, CA 94720-3880
Tel: 510/642-3878
Fax: 510/548-5561
E-Mail: bhhall@nber.org
AB  - Several studies based on US and UK data have used market value as an indicator of the firm''s expected R&D performance. However, there exist no investigations for the continental countries in the European Union, partly because the analysis is complicated by data availability problems. In this paper we take a first step towards filling this gap using a newly constructed panel dataset of firms that are publicly traded in France, Germany, and Italy. Controlling for either permanent unobserved firm effects or sample selection due to the voluntary nature of R&D disclosure, we find that the relative shadow value of R&D in France and Germany is remarkably similar both to each other and to that in the US or the UK during the same period In contrast, we find that R&D in publicly traded Italian firms is not valued by financial markets on average. However, when we control for the presence of a single large shareholder, we find that both French and Italian firms have high R&D valuations when no single shareholder holds more than one third of the firm, but that R&D is essentially not valued in the other firms.
ER  -