The effect of R&D on firm values in the Swedish market
Abstract: In this study, we investigate the economic value of R&D investments for i) all Swedish listed firms, ii) firms of different sizes, iii) manufacturing firms, and iv) high-technology firms. We use the market value approach to proxy the economic value of intangible assets created by R&D activities on the Swedish market over time. Our results show support for the hypothesis that R&D investments provide economic value not accounted for in the balance sheet and that it provides even greater value for manufacturing firms and high-technology firms. Further, we use a three-fold size-category partition and can generally show increased importance of R&D for the market value of larger firms. The paper extends the field of research by applying the market value approach to value intangible assets from R&D investments in the Swedish market. Furthermore, using this approach to estimate the economic value of R&D for high-technology firms in the internet era has, to the best of our knowledge, not been done previously.
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