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ISSN : 2287-1608
Stock Excess Return, R&D intensity and Market Concentration: A Study of IT Firms in India
K. Narayanan
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Abstract
This paper empirically investigates the role of R&D intensity on market concentration of firms using four key market valuation variables, namely (1) market share, (2) labor intensity, (3) firm age and, (4) firm’s market value. The empirical tests use database at firm level for the Indian IT sector from 1999 to 2013 from the CMIE Prowess database. The results of the regression analyses partially support our hypothesis that R&D intensity positively influences firm’s market value measure by the H-index. The test results are consistent with the hypotheses that R&D spending is more valuable for firms with larger market shares, higher labor intensity, and firms that are diversified.
- keywords
- Investor valuation, R&D, IT industry, India
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