Template-type: ReDIF-Paper 1.0
Author-Name: Antonelli, Cristiano 
Author-Email: cristiano.antonelli@unito.it
Author-Name: Colombelli, Alessandra
Author-Email: colombelli.alessandra@unito.it
Author-Workplace-Name: University of Turin
Author-Workplace-Homepage: http://www.est.unito.it/
Title: The Generation and Exploitation of Technological Change: Market Value and Total Factor Productivity.
Abstract:In this paper we articulate and test the hypothesis that TFP is a reliable and relevant measure of firm’s 
innovation capabilities, and, as such, accounts for Tobin’s q indicator.
With this aim, we investigate empirically the relationship between firm level total factor productivity and the 
Tobin’s q. Measuring Tobin’s q allows inferring the actual value of knowledge capital from stock market valuation. 
We use a panel of companies listed on UK and the main continental Europe financial markets (Germany, France and 
Italy) for the period 1995 - 2005. Our results confirm that TFP is a reliable indicator of firm’s innovative capabilities. 
When we control for firm’s R&D investments, the effects of TFP on market value remain highly significant. 
This suggests that TFP is a broader measure of innovation capability than R&D is. The validation of the Tobin’s q 
and TFP relationship has important implications concerning firm’s technological innovation measurement.
Length: 33 pages
Creation-Date: 2009-09
File-URL: http://www.est.unito.it/do/home.pl/Download?doc=/allegati_wp/wp2009dip_l_b/12_wp_momigliano.pdf
File-Format: Application/PDF
Handle: RePEc:uto:labeco:200912