TY - UNPB
T1 - The second mover advantage
T2 - R&D and absorptive capacity
AU - Eswar, Sapnoti
AU - Ferguson, Michael F.
AU - Yoon, Jayoung
PY - 2022/12/6
Y1 - 2022/12/6
N2 - Absorptive capacity (AC) is the extent to which a firm can translate R&D spillovers from its technological counterparts into its own productivity. We employ a new measure of AC based on Total Factor Productivity. Our measure of AC is positively related to real innovative outcomes: small firms with high AC produce higher quantity and quality of patents. Small firms with High AC earn positive risk-adjusted returns. These returns are positively related to long-horizon mis-pricing factors, limits to arbitrage, and limited investor attention. They are incremental to other linkages between firms and other, recognized R&D underpricing factors.
AB - Absorptive capacity (AC) is the extent to which a firm can translate R&D spillovers from its technological counterparts into its own productivity. We employ a new measure of AC based on Total Factor Productivity. Our measure of AC is positively related to real innovative outcomes: small firms with high AC produce higher quantity and quality of patents. Small firms with High AC earn positive risk-adjusted returns. These returns are positively related to long-horizon mis-pricing factors, limits to arbitrage, and limited investor attention. They are incremental to other linkages between firms and other, recognized R&D underpricing factors.
KW - Research & development
KW - Absorptive capacity
KW - Patents
KW - Returns predictability
KW - Market efficiency
U2 - 10.2139/ssrn.4283674
DO - 10.2139/ssrn.4283674
M3 - Working paper
T3 - S&P Global Market Intelligence Research Paper Series
BT - The second mover advantage
PB - SSRN
CY - Online
ER -