Innovation Novelty and Firm Value: Deep Learning-Based Text Understanding

  • Yuk Yee Chan
  • , Wei Hu
  • , Jianming Huang
  • , Wanyue Zhou
  • , Xin Li

Research output: Chapter in book / Conference proceedingConference article published in proceeding or bookAcademic researchpeer-review

Abstract

Innovation is widely acknowledged as a key driver of firm performance, with patents serving as unique indicators of a company’s technological advancements. This study aims to investigate the impact of textual novelty within patents on firm performance, focusing specifically on biotechnology startups listed on the Nasdaq. Utilizing deep learning-based approaches, we construct measures for semantic originality in patent texts. Through panel vector autoregressive (VAR) analysis, our empirical findings demonstrate a positive correlation between textual novelty and abnormal stock returns. Further, impulse response function analysis indicates that the impact of textual novelty peaks approximately one week after patent issuance and gradually diminishes within a month. These insights offer valuable contributions to both the theoretical understanding and practical application of innovation management and strategic planning.

Original languageEnglish
Title of host publicationInternational Conference on Information Systems, ICIS 2023
Subtitle of host publication"Rising like a Phoenix: Emerging from the Pandemic and Reshaping Human Endeavors with Digital Technologies"
PublisherAssociation for Information Systems
ISBN (Electronic)9781713893622
Publication statusPublished - 2023
Externally publishedYes
Event44th International Conference on Information Systems: Rising like a Phoenix: Emerging from the Pandemic and Reshaping Human Endeavors with Digital Technologies, ICIS 2023 - Hyderibad, India
Duration: 10 Dec 202313 Dec 2023

Publication series

NameInternational Conference on Information Systems, ICIS 2023: "Rising like a Phoenix: Emerging from the Pandemic and Reshaping Human Endeavors with Digital Technologies"

Conference

Conference44th International Conference on Information Systems: Rising like a Phoenix: Emerging from the Pandemic and Reshaping Human Endeavors with Digital Technologies, ICIS 2023
Country/TerritoryIndia
CityHyderibad
Period10/12/2313/12/23

Keywords

  • deep learning
  • Innovation
  • patent
  • stock market
  • text analysis

ASJC Scopus subject areas

  • Computer Science Applications
  • Information Systems

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