Title: Innovation, market share and firm value: evidence from personal computer industries

Authors: Bi-Huei Tsai

Addresses: Department of Management Science, College of Management, National Chiao Tung University, Taiwan 300, ROC

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.

Keywords: accounting standards; innovation; market share; patents; firm value; personal computers; tax shields; research and development; R&D; services.

DOI: 10.1504/IJSS.2007.011829

International Journal of Services and Standards, 2007 Vol.3 No.1, pp.79 - 96

Published online: 24 Dec 2006 *

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