NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Sunil Kanwar

Delhi School of Economics
University of Delhi
Delhi 110 007
India

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NBER Working Papers and Publications

May 2015The 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.
 
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