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Innovation and idiosyncratic risk: an industry- and firm-level analysis
journal contribution
posted on 2023-06-08, 09:45 authored by Mariana Mazzucato, Massimiliano TancioniRecent studies find that idiosyncratic risk (IR)- the degree to which firm-specific returns are more volatile than aggregate market returns - has increased since the 1960s and attribute this to economy-wide factors such as the role of the IT revolution. Yet no innovation data is used in these studies. To gain further insights into the relationship between technology and IR, our aricle studies whether firms and industries that are more R&D intensive are in fact characterized by higher IR due to how innovation affects the uncertainty of expected future profits. While the industry-level results prove inconclusive, a clear relationship is found between firm-level R&D intensity and firm-level volatility of returns.
History
Publication status
- Published
Journal
Industrial and Corporate ChangeISSN
0960-6491Publisher
Oxford University PressExternal DOI
Issue
4Volume
17Page range
779-811Department affiliated with
- SPRU - Science Policy Research Unit Publications
Full text available
- No
Peer reviewed?
- Yes