Rich on paper? Chinese firms' academic publications, patents, and market value

Keywords Academic publications; Firm value; Innovation; Patents; Human capital Highlights * Analyzes firm valuation effects of academic publications and patents of China's publicly listed firms. * Chinese firms' academic publications are positively associated with their market valuation. * This positive relation is more pronounced when these firms have stronger patent records. * Mechanism tests suggest Chinese firms' academic publications are beneficial to their human capital stock and function as credible signals of quality to the market. Abstract By combining various databases of academic publications and patents of China's publicly listed firms, we explore the effects of academic publications on firm valuation. We find that Chinese firms' academic publications are positively associated with their market valuation. More importantly, such a positive relation is more pronounced when these firms have stronger patent records, highlighting a synergy between basic research and applied technologies. Mechanism tests indicate that firms' academic publications promote their market values through enhancing their human capital and sending credible signals to the market. We also find that publications in English-language journals are more value-relevant than in Chinese-language journals. Author Affiliation: (a) The Wharton School, The University of Pennsylvania, United States (b) College of Technology Management, National Tsing Hua University, Taiwan (c) Institute of Quantitative and Technological Economics, Chinese Academy of Social Sciences, China * Corresponding author. Article History: Received 16 November 2020; Revised 30 June 2021; Accepted 30 June 2021 Byline: David H. Hsu [dhsu@wharton.upenn.edu] (a,*), Po-Hsuan Hsu [pohsuanhsu@mx.nthu.edu.tw] (b), Qifeng Zhao [zhaoqf@cass.org.cn] (c)