R&D, knowledge spillovers and stock volatility

Research output: Journal article publicationJournal articleAcademic researchpeer-review

15 Citations (Scopus)


Firms improve their know-how not only by innovations (producing new knowledge), but also by knowledge spillovers (learning from others). The objective of this study is to test for two major hypotheses developed from a theoretical model explaining the relationship between R&D, knowledge spillovers and stock volatility. Analytically, the model suggests that asymmetric information caused by R&D activities with uncertain future output increases stock volatility, even though dividends and consumptions remain unchanged. However, interfirm knowledge spillovers have a negative impact on stock volatility by reducing the degree of asymmetric information. Both hypotheses are supported by empirical evidence from this study.
Original languageEnglish
Pages (from-to)107-124
Number of pages18
JournalAccounting and Finance
Issue number1
Publication statusPublished - 1 Mar 2006


  • Knowledge spillover
  • R&D
  • Stock volatility

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics, Econometrics and Finance (miscellaneous)


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