Companies with more financial analysts produce more and better-quality patents
Long-term growth in profits depends significantly on firms’ investment in innovation activities. However, firms may not invest in innovation in an optimal way. Some distortions arise because the decisions as to whether and how to invest in innovation are not only affected by their long-term expected benefits but also by other considerations. A recent study conducted by researchers from the Universidad Carlos III de Madrid (UC3M), in collaboration with the Universidad Autónoma de Barcelona (UAB), explores the role of financial analysts on firms’ innovation strategy and outcome. This study concludes that financial analysts can help companies to invest more efficiently in innovation and therefore produce a higher number of patents and of better-quality. |
