Effects of technical innovation on market value of the US semiconductor industry

This article discusses the effects of technical innovation on the market value (MV) of the American semiconductor industry from the perspective of investors in the securities market. The study quantifies the technical innovations of the semiconductor industry and uses the proportional change of Average Process Technology (APT) as a proxy variable to measure the industrial capability of technical innovations and to act as one of the explanatory variables of a regression model for discussing the connection between technical innovation and MV. The results indicate that: 1) the degree of technical innovation and the proportional change in productivity of the semiconductor industry are the major factors that affect proportional change in the MV of the U.S. semiconductor industry; 2) regardless of the size of a company's MV or the companies' classification in terms of products and services (the Equipment & Material Sector, the Board Line Sector, the IC & Chip Sector and the Fabless & Specialist Sector), the degree of technical innovation shows a significant positive effect on MV. (C) 2010 Elsevier Inc. All rights reserved.