Does Innovation Cause Stock Market Runups? Evidence from the Great Crash

This article examines the stock market's changing valuation of corporate patentable assets between 1910 and 1939. It shows that the value of knowledge capital increased significantly during the 1920s compared to the 1910s as investors responded to the quality of technological inventions. Innovation was an important driver of the late 1920s stock market runup, and the Great Crash did not reflect a significant revaluation of knowledge capital relative to physical capital. Although substantial quantities of influential patents were accumulated during the post-crash recovery, high technology firms did not earn significant excess returns over low technology firms for most of the 1930s. (JEL G14, N12, N22, O30)

Download Full-text

Long-term buyer-supplier relationships in IT services

Journal of Business and Industrial Marketing ◽

10.1108/jbim-06-2020-0292 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Kedwadee Sombultawee ◽

Prasopchai Pasunon

Keyword(s):

High Technology ◽

Integrative Model ◽

Supplier Relationships ◽

Content Type ◽

Technology Firms ◽

Success Model ◽

High Technology Firms ◽

Supplier Relationship

Purpose The purpose of this study is to explore an integrative model of supplier success, using a case study of the Thai high-technology firms. The study focuses on buyer-supplier relationships of information systems (IS), including bundles of hardware, software and services because these relationships are dependent on both immediate performance quality of the IS and long-term maintenance of a strong buyer-supplier relationship. Design/methodology/approach The research used an integrative model that incorporated the DeLone and McLean (2003) IS success model, representing system quality and Clauss and Tangpong’s (2018) impregnable exchange relationship model, representing relationship quality. Exploratory mixed methods study incorporated interviews with supplier relationship managers at five Thai high-technology firms (n = 15) and a quantitative survey of buyer firms (n = 393). Findings Results supported the integrative system-supplier success model. The most significant limitation is that the study was only conducted in a single industry (high tech) when the IS buyer-supplier relationships modeled here are ubiquitous in modern business. Research limitations/implications Despite this limitation, the research contributes to the literature by developing and testing a long-term buyer-supplier relationship success model that incorporates both the characteristics of an IS and the supplier characteristics that lead to positive outcomes. Originality/value This study makes intuitive sense and being demonstrated statistically – the fact that the overall quality of an IS, coupled with a well-liked, non-substitutable supplier with a history of good performance, would be considered to be a successful supplier relationship is not especially controversial. The value of the study lies in the integration of the two models to represent different aspects of supplier performance, which could have a different effect on the buyer-supplier relationship in the long-term.

Download Full-text

The Day Ahead: IPO Today, Acquired Tomorrow?

Journal of Business Theory and Practice ◽

10.22158/jbtp.v6n2p184 ◽

2018 ◽

Vol 6 (2) ◽

pp. 184

Author(s):

Qian W. Mao ◽

Mingshan Zhang ◽

Lin Zou

Keyword(s):

Financial Markets ◽

Transaction Costs ◽

High Technology ◽

Investment Banks ◽

Public Firms ◽

Technology Firms ◽

New Public ◽

Ex Ante ◽

High Technology Firms

We study the double exit phenomenon—new IPO firms get acquired quickly in the M & A market. In this paper, we attempt to discern the distinct characteristics of new public firms that made them acquired soon after their IPOs. Specifically we find that double exit firms are those backed by venture capital. Double exit firms generally have prestigious investment banks underwrite their IPOs. High technology firms are more likely to be taken over soon after their IPOs. Also, double exit firms have higher level of intangible assets. We suggest that IPO may play an important role in firms’ following acquisition incidence. First, IPO helps to reduce ex ante transaction costs between firms and financial markets, such as raising external capitals. Second, IPOs wink signals concerning the quality of the firm.

Download Full-text