Do Innovations Really Payoff Total Stock Market Returns to Innovation
➤ Gửi thông báo lỗi ⚠️ Báo cáo tài liệu vi phạmNội dung chi tiết: Do Innovations Really Payoff Total Stock Market Returns to Innovation
Do Innovations Really Payoff Total Stock Market Returns to Innovation
Do Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing. Do Innovations Really Payoff Total Stock Market Returns to Innovation Goizueta School of Business, Emory University. Address: 1300 Clifton Rd NE, Atlanta, GA 30322; tel: +1.404-727-4226, fax: +1.404-727-3552, E-mail: ashish SOTd@b.U5xemoiX£dll-Gerard J. Tellis is Professor of Marketing, Director of the Center for Global Innovation and Neely Chair in American Enterpri Do Innovations Really Payoff Total Stock Market Returns to Innovationse at the Marshall School of Business, University of Southern California. Address: P.O. Box 90089-1421, Los Angeles, California, USA. Tel: +1.213.740.Do Innovations Really Payoff Total Stock Market Returns to Innovation
5031, fax: +1.213.740.7828, E-mail: tellis@usc.edu.The study benefited from grants by Don Murray to the use Marshall Center for Global Innovation, theDo Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing. Do Innovations Really Payoff Total Stock Market Returns to Innovationand research assistance of Shashi Mohindra, Angie Zerillo, and Ade Lawal-Solarin.Do Innovations Really Payoff? Total Stock Market Returns to InnovationABSTRACTCritics often decry a short-term orientation of management that eschews spending on risky, long term projects such as innovation in order to Do Innovations Really Payoff Total Stock Market Returns to Innovationboost a firm’s stock price. The assumption of such a criticism is that stock markets are not responsive to efforts of firms in innovation that have aDo Innovations Really Payoff Total Stock Market Returns to Innovation
long-term payoff. The authors argue that the market’s true appreciation of innovation can be estimated by assessing the total market returns to the enDo Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing. Do Innovations Really Payoff Total Stock Market Returns to Innovationements from 69 firms in 5 markets and 19 technologies, during the period 1977-2006.The authors find that total market returns to an innovation project are $643 million, more than 13 times the $49 million due to an average innovation event. Returns to negative events are higher in absolute value than Do Innovations Really Payoff Total Stock Market Returns to Innovation those to positive events. Returns to development activities are higher than returns to either the setup or market activities. Returns are higher forDo Innovations Really Payoff Total Stock Market Returns to Innovation
smaller firms than larger firms. Returns to the announcing firm are substantially greater than those to competitors across all stages. The authors disDo Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing. Do Innovations Really Payoff Total Stock Market Returns to Innovationstract: A new metric for evaluating innovation: the total stock market returns to an innovation project"2INTRODUCTIONInnovation is probably one of the most important forces in fueling the growth of new products, sustaining incumbents, creating new markets, transforming industries, and promoting the Do Innovations Really Payoff Total Stock Market Returns to Innovationglobal competitiveness OÍ nations. F.ven so, many researchers, analysts, and managers fear that films do not invest enough in innovation. According toDo Innovations Really Payoff Total Stock Market Returns to Innovation
the Mil technology Reviews annual survey of R&D in 2004, corporate R&D spending across a broad cross-section OÍ industries is on the decline. Some goDo Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing. Do Innovations Really Payoff Total Stock Market Returns to Innovationearch and development relative to other nations (Hall 1993; National Innovation Initiative Report 2004; Council on Competitiveness Report 2001). Firms may under-invest in R&D because of the high costs, the long delay in reaping market returns if any, the uncertainty of those returns, and the difficu Do Innovations Really Payoff Total Stock Market Returns to Innovationlty of adequately measuring them. The increasing speed of diffusion across global markets (Chandrasekaran and Tellis 2008) and the diverse patterns ofDo Innovations Really Payoff Total Stock Market Returns to Innovation
consumer adoption across products and countries (Sood, James, and Tellis 2008) further exacerbate the challenges for firms to predict returns to new Do Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing. Do Innovations Really Payoff Total Stock Market Returns to Innovationave a long payoff, rhe underlying assumption of such a criticism is that the market docs not reward efforts in innovation that typically lake lime to show returns. Accurately assessing the market returns Io innovation may be critical to understanding how markets respond to innovation and motivating Do Innovations Really Payoff Total Stock Market Returns to Innovationfirms to invest in innovation. Hence, this topic is in the Marketing Science Institute's list of lop research priorities for tire last few years.The mDo Innovations Really Payoff Total Stock Market Returns to Innovation
arket returns to innovation is one of the best means of assessing the tnie rewards to innovation. Past research has examined the effect of innovation Do Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing. Do Innovations Really Payoff Total Stock Market Returns to Innovation that the path of causality is not clear. Under the assumption that the stock market is efficient, such returns can be assessed by the event study (Fama 1998). The event study measures the stock market reaction to new information in an event, which is assumed to be proportional to the net present va Do Innovations Really Payoff Total Stock Market Returns to Innovationlue of the new information. In an early application of this method, Chaney, Devinney and Winer (1991) report market returns of 0.25% to an isolated evDo Innovations Really Payoff Total Stock Market Returns to Innovation
ent, new product introduction. Past research has also estimated returns to other isolated events of an innovation project (see Table 1).There are threDo Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing. Do Innovations Really Payoff Total Stock Market Returns to Innovations really the sum of all events in an innovation project. A focus on returns to specific events in the innovation project may be one reason why markets appear to undervalue innovation. Second, a focus on specific events cannot reveal how returns are distributed over the entire project. Such knowledge Do Innovations Really Payoff Total Stock Market Returns to Innovation is useful to both understand which event of an innovation project gets the most returns and what announcement strategy firms should adopt. Third, retDo Innovations Really Payoff Total Stock Market Returns to Innovation
urns on specific events may be deflated due to excessive announcements or inflated due to few announcements in the innovation project. We can ascertaiDo Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing. Do Innovations Really Payoff Total Stock Market Returns to Innovationfor other events and strategic and structural variables.Hence, a researcher may arrive at erroneous estimates of the true rewards to innovation by limiting the scope of study to announcements of only a new product’s introduction or any other single event. As far as we know, there is no study on mark Do Innovations Really Payoff Total Stock Market Returns to Innovationet returns to all events in an4innovation project. This is the goal of the current study. In particular, it seeks answers to the following questions:•Do Innovations Really Payoff Total Stock Market Returns to Innovation
How do stock markets react to each event in an innovation project, after controlling for other events?•What are the total market returns to the innovaDo Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing. Do Innovations Really Payoff Total Stock Market Returns to Innovationproductivity) variables affect the market returns to innovation?•How do the market returns of competitors compare to those of the announcing firm?The rest of the paper is organized as follows: The next three sections present the theory, method, and findings. The last section discusses the findings, Do Innovations Really Payoff Total Stock Market Returns to Innovationlimitations, and implications of the research.CONCEPTUAL BACKGROUNDThis section reviews prior findings and expectations about markets returns to innovDo Innovations Really Payoff Total Stock Market Returns to Innovation
ation. To better lay out the area, it begins by defining the key terms and assumptions of the study.DefinitionsWe define four key terms: technology, iDo Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing. Do Innovations Really Payoff Total Stock Market Returns to Innovationproducts to serve a consumer need. For example neon lamps are based on fluorescence technology which produces light by the distinct scientific principle of fluorescence. Halogen lamps are based on incandescence technology which produces light by the distinct scientific principle of incandescence (Ap Do Innovations Really Payoff Total Stock Market Returns to Innovationpendix A has details). Several new products and models5Do Innovations Really Payoff?Total Stock Market Returns to InnovationAshish Sood and Gerard J. TellisAshish Sood is Assistant Professor of Marketing.Gọi ngay
Chat zalo
Facebook