Delhi School of Economics
University of Delhi
Delhi 110 007
Information about this author at RePEc
NBER Working Papers and Publications
|May 2015||The Market Value of R&D in Weak Innovation Regimes: Evidence from India|
with Bronwyn H. Hall: w21196
We revisit the relationship between market value and innovation in the context of manufacturing firms in a developing country, using Indian data from 2001 through 2010. Surprisingly, we find that financial markets value the R&D investment of Indian firms the same or higher than such investment is valued in developed economies like the US. Using a proxy for the option value of R&D, we find that this accounts for a very small part of the R&D valuation (5% at most). We also find that the market value-R&D relationship does not vary significantly across industry groups, although these results are imprecise.