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• Between 2014 and 2017, the Pound depreciated against the Dollar due to monetary and institutional factors. • The effects of exchange-rate depreciation on the trade balance are heterogeneous among the UK's industries. • Following the currency depreciation, science-based industries tend to show a long-run negative effect. • The ARDL methodology is suitable for investigating the dynamics of exchange rates and the trade balance in the short and long runs. Between May 2014 and April 2017, the Pound Sterling depreciated substantially against the Dollar. The objectives of this paper are: 1) to investigate how that depreciation affected the main British industries; 2) to verify whether the trade asymmetries following the currency depreciation can be explained by considering the technological features of the industries as represented in the Pavitt Taxonomy. Using an ARDL methodology, our study analyses the effects of this depreciation for the UK with respect to the USA. We employ industry-level data at monthly frequency for the period 2010–2019. In detail, our estimation suggests that only in four industries out of thirty did the Trade Balance improve in the long run, while it worsened in eight. Moreover, our analysis shows that the Pound Sterling's depreciation against the Dollar had a long-run negative effect on the science-based UK industries. Finally, the size of industries does not seem to give clear indications as to long-term dynamics. [ABSTRACT FROM AUTHOR]

In times of crisis, innovation and entrepreneurship can be considered as a path out of valuation uncertainty of firms. All types of innovation output, however, may not have a similar impact across different firm size and sectors during bad times. Specifically, financially less-constrained (high leverage) innovative firms could be valued higher or experience less uncertainty in their performance. By considering the innovation intensity and leverage in pre- and post-2008 financial crisis periods, and using firm-level quarterly data from listed firms in the UK during 2000–2014, we find that leveraged firms can achieve greater valuation and mitigate any valuation uncertainty in the post-crisis period if they are knowledge- or high-technology intensive. In terms of size effect, although leverage distorts market valuation of large UK firms, the impact is positive for SMEs that are innovation intensive. Finally, in terms of sectoral effect, firms within manufacturing and services with leverage have benefitted from R&D and patenting activities during the post-crisis period, but not in the pre-crisis period. This also gets revealed when we classify all firms into high-tech and low-tech sectors, implying that firms in the high-tech sectors with debt dependence have benefitted favorably in terms of higher valuation and lower uncertainty in the post-crisis period, not firms in the low-technology sectors, reflecting further the role of technological intensity in firm valuation. [ABSTRACT FROM AUTHOR]