NDLI: Valuing high technology growth firms

Content Provider	Springer Nature Link
Author	Klobucnik, Jan Sievers, Soenke
Copyright Year	2013
Abstract	For the valuation of fast growing innovative firms Schwartz and Moon (Financ Anal J 56:62–75, 2000), (Financ Rev 36:7–26, 2001) develop a fundamental valuation model where key parameters follow stochastic processes. While prior research shows promising potential for this model, it has never been tested on a large scale dataset. Thus, guided by economic theory, this paper is the first to design a large-scale applicable implementation on around 30,000 technology firm quarter observations from 1992 to 2009 for the US to assess this model. Evaluating the feasibility and performance of the Schwartz-Moon model reveals that it is comparably accurate to the traditional sales multiple with key advantages in valuing small and non-listed firms. Most importantly, however, the model is able to indicate severe market over- or undervaluation from a fundamental perspective. We demonstrate that a trading strategy based on our implementation has significant investment value. Consequently, the model seems suitable for detecting misvaluations as the dot-com bubble.
Starting Page	947
Ending Page	984
Page Count	38
File Format	PDF
ISSN	00442372
Journal	Zeitschrift für Betriebswirtschaft
Volume Number	83
Issue Number	9
e-ISSN	18618928
Language	English
Publisher	Springer Berlin Heidelberg
Publisher Date	2013-07-30
Publisher Place	Berlin, Heidelberg
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Schwartz-Moon model Market mispricing Empirical test Company valuation Trading strategy Business/Management Science Production/Logistics/Supply Chain Organization/Planning Human Resource Management Accounting/Auditing Business Taxation/Tax Law
Content Type	Text
Resource Type	Article
Subject	Business and International Management Economics and Econometrics

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
7	National Digital Library of India Club (NDLI Club)	Queries related to NDLI Club formation, support, user awareness program, seminar/symposium, collaboration, social media, promotion, and outreach	clubsupport@ndl.gov.in
8	Digital Preservation Centre (DPC)	Assistance with digitizing and archiving copyright-free printed books	dpc@ndl.gov.in
9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in

Does consistency improve accuracy in multiple—based valuation?

Does professional tax preparation matter? Empirical evidence from Germany

Cross-functional patent management in family firms

On “preference-dependent” valuation in the context of personal taxation

Risk management and business valuation in M&A transactions: editorial

Corporate prediction markets: a tool for predicting market shares

Corporate valuation using imprecise cost of capital

Special issue “Insider Econometrics”

Wealth creation of mergers in downturn markets

Valuing high technology growth firms

Similar Documents

Does consistency improve accuracy in multiple—based valuation?

Does professional tax preparation matter? Empirical evidence from Germany

Cross-functional patent management in family firms

On “preference-dependent” valuation in the context of personal taxation

Risk management and business valuation in M&A transactions: editorial

Corporate prediction markets: a tool for predicting market shares

Corporate valuation using imprecise cost of capital

Special issue “Insider Econometrics”

Wealth creation of mergers in downturn markets

Valuing high technology growth firms