Impact of investor sentiment on firm innovation: Evidence from textual analysis

Lin, Zihao

doi:10.1016/j.bir.2023.07.002

Cited by 8 publications

(2 citation statements)

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“…Similarly, both institutional ownership and hedge fund activism enhance rm innovation through monitoring efforts (Chi et al, 2019;Miller et al, 2023;Brav et al, 2018;Tang, 2020). Lin (2023) found a positive correlation between rm innovation and investor sentiment in China between 2010 and 2021. However, few studies examine the effect of stock mispricing on enterprise innovation in emerging markets.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 92%

“…Firms can adapt to changing conditions and promote sustainable growth through innovative projects. Corporate innovation is in uenced by several aspects of the equity market, including stock liquidity (Fang et al, 2014;Wen et al, 2018), institutional ownership (Chi et al, 2019;Miller et al, 2023), hedge fund activism (Brav et al, 2018;Tang, 2020), investor sentiment (Xu et al, 2019;Lin, 2023). However, papers examining the effect of misvaluation on rm innovation are few and far between, especially emerging markets.…”

Section: Introductionmentioning

confidence: 99%

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Stock mispricing and firm innovation: evidence from an emerging equity market

Duong

2024

Preprint

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This study analyzes the effects of equity market mispricing on firm innovation. Using a sample of nearly 450 non-financial listed firms in Vietnam from to 2014-2023, the authors examine whether firm innovation is sensitive to stock mispricing. Adopting the method of Rhodes-Kropf et al. (2005), the authors estimated the difference between market capitalization and the long-term fundamental value of equity to measure stock mispricing. As Shen et al. (2021) suggest, firm innovation is measured by research and development funding scaled by operating income. The relationship between stock misvaluation and firm innovation was analyzed using regression analysis. Empirical results show that stock mispricing positively affects firm innovation in Vietnam. Overvalued listed companies invest more actively in R&D. Further, the relationship between stock mispricing and corporate innovation is more prominent for frequently traded stocks. The promoting effect of stock mispricing on enterprise innovation is amplified in high-growth firms. This study provides new evidence regarding the impact of stock mispricing on firm innovation in Vietnam, in comparison with more developed markets such as the US or representative emerging markets such as China. Our results help foreign investors and scholars to better understand the connection between equity markets and corporate finance in the context of Vietnam

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 92%

Section: Introductionmentioning

confidence: 99%

Stock mispricing and firm innovation: evidence from an emerging equity market

Duong

2024

Preprint

View full text Add to dashboard Cite

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The impact of U.S. economic sanctions on corporate innovation and fraud

Bazrafshan

2024

Public Admin & Development

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Economic sanctions have increasingly become a pivotal tool in modern foreign policy, especially in the context of U.S. international strategy. Despite their growing significance, there is a notable lack of empirical research on how these sanctions affect corporate behavior. This study aims to explore the impact of U.S. economic sanctions on innovation and fraudulent activities within Iranian firms subjected to these measures. Utilizing a difference‐in‐differences approach, the findings reveal a weak and negative relationship between sanctions and innovation, while no significant link is found between sanctions and fraudulent activities. Notably, the study uncovers a substantial divergence in companies' responses to sanctions based on their innovation background. Companies with a strong innovation background experience a significant increase in innovation efforts and a corresponding decline in fraudulent behavior upon facing sanctions. In contrast, companies lacking an established innovation background exhibit a reduction in innovation and, in turn, an escalation in fraudulent practices in response to sanctions. These findings remain robust across various sensitivity analyses. This research contributes to the expanding body of empirical literature on sanction outcomes by highlighting the profound impact of innovation background on the responsible and ethical decisions made by sanctioned companies.

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