Innovation, market share and firm value: evidence from personal computer industries. (27th December 2006)

• Record Type: Journal Article
• Authors: Tsai, Bi-Huei
• Is Part Of: International journal of services and standards. Volume 3:Number 1(2007)
• Page Start: 79
• Page End: 96
• Publication Date: 2006-12-27
• Subjects: accounting standards -- innovation -- market share -- patents -- firm value -- personal computers -- tax shields -- research and development -- R&amp -- D -- services; Standardization -- Periodicals; Customer services -- Standards -- Periodicals; 389.605
• Languages: English
• ISSNs: 1740-8849

Abstract

Innovation effects on firm value have not been effectively discussed because previous studies ignore the market share and tax shields from Research and Development (R&D). This paper explores how innovation increases firm value through market shares of Personal Computer (PC) firms. The results exhibit that patent performance and tax shields are positively related to firm value. Our investigation also shows that dominant firms are more highly involved in innovative activities to maintain market power. The marginal benefit of innovation becomes greater for firms with stronger market share, which supports the complementary effect of market shares and innovations on firm value.