A relationship between technology indicators and stock market performance

One of the main objectives of technology analyses is to understand how investing intechnological innovation can have commercial benefits. However, empirical studies of therelationship between investments in technology and subsequent economic performance arerelatively scarce. This paper provides such an analysis by demonstrating how quantitative R&Dand technology indicators may be used to forecast company stock price performance. The purposeof the analysis is to utilize a unique patent database, and the science and technology indicatorsdeveloped from the data therein, to explore this issue of technological competence and economicperformance.The underlying concept behind this study is that the quality of a company's technology isreflected in its patent portfolio. Previous research has shown that a company with a largepercentage of influential patents is much more likely to be technologically successful than acompany with weaker patents. The analysis presented here reveals that such a company is alsomore likely to be successful in capital markets.