Innovation performance and company value

Vatchagan, Vartanian

2003

The share prices of innovative companies at international growth exchanges were highly volatile between 1997 and 2001, surprising even experts and challenging traditional methods of valuation. Specific features of young, innovative companies suggest that innovation makes an impact on company value performance. Thus it makes sense to take this into account when employing methods of valuation.

In his thesis "Innovation performance and company value. Empirical analysis of growth-oriented capital markets" Vatchagan Vartanian investigates the connection between innovation performance and company value by using several regression models. He analyzes correlations of different variables that describe innovation performance and company value, partly taking other parameters and different stock market phases into account. He shows a strong relation between innovation performance and company value both for the Nasdaq and the former Neuer Markt. The author also examines the extent to which innovation performance can serve as a value indicator for young, innovative companies.