Does the Market Value R&D Investment by European Firms? Evidence from a Panel of Manufacturing Firms in France, Germany, and Italy

The authors use a newly constructed panel dataset of firms that are publicly traded in France, Germany, and Italy. They find that the relative shadow value of research and development (R&D) in France and Germany is remarkably similar both to each other and to that in the U.S. or the United Kingdom. During the same period In contrast, R&D in publicly traded Italian firms is not valued by financial markets on average.