Patent Citations and Financial Analysts’ Long-Term Growth Forecasts

This paper examines the influence of patent citations, a proxy for the quality of firms’ innovation outputs, on financial analysts’ long-term growth forecasts for firms. We find that financial analysts are more likely to issue long-term forecasts for firms with higher patent citations. In addition,...

Full description

Saved in:
Bibliographic Details
Published inSustainability Vol. 9; no. 5; p. 846
Main Authors Bae, Jincheol, Hur, Wonchang, Lee, Jaehong, Goh, Jaimin
Format Journal Article
LanguageEnglish
Published Basel MDPI AG 19.05.2017
Subjects
Capital markets
Innovations
Markets
Sustainability
Online AccessGet full text

Cover

More Information
Summary:This paper examines the influence of patent citations, a proxy for the quality of firms’ innovation outputs, on financial analysts’ long-term growth forecasts for firms. We find that financial analysts are more likely to issue long-term forecasts for firms with higher patent citations. In addition, we find that financial analysts’ long-term forecasts are more positive for firms with high patent citations. These results imply that patent citations increase financial analysts’ coverage, and result in more positive forecasts for firms with impactful patents. Considering that financial analysts play important roles in allocating financial resources in capital markets, our findings suggest that patents are valuable assets for firms in securing capital from capital markets, and are thus essential for the sustainable growth of firms.
ISSN:2071-1050
2071-1050
DOI:10.3390/su9050846