The relation between innovation and stock market return

This bachelor thesis examines the effects of innovation activities on the value of publicly traded firms. The main focus is on the automotive and aerospace industries in Europe during the period 2009-­‐2014. Patent publications serve as a proxy for innovation activities. According to current literature it is still unclear what the true value of patents is. This thesis contributes to existing literature through examination of market reaction. It seems that there is no significant reaction to patent publication by automotive and aerospace firms. Furthermore, the results show that there is no difference in appreciation among these industries.