Christophe Dispas - Innovation and Financial Markets

1 Cover

2 Title Page Innovation between Risk and Reward Set coordinated by Bernard Guilhon and Sandra Montchaud Volume 7

3 Copyright First published 2021 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc. Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address: ISTE Ltd 27-37 St George’s Road London SW19 4EU UK www.iste.co.uk John Wiley & Sons, Inc. 111 River Street Hoboken, NJ 07030 USA www.wiley.com © ISTE Ltd 2021 The rights of Christophe Dispas, Georges Kayanakis, Nicolas Servel and Ludmila Striukova to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. Library of Congress Control Number: 2021930258 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library ISBN 978-1-78630-066-9

4 Foreword

5 Introduction

6 1 From the Idea to the Stock Market 1.1. Prologue 1.2. A long and rigorous path 1.3. Categories to represent the progress made 1.4. Use of criteria satisfaction levels as a rating guide

7 2 How to Develop the Innovative Capacity of Companies 2.1. Introduction 2.2. Siphoning queries to produce an idea 2.3. Having the means (skills) required 2.4. Having an appropriate organization

8 3 Innovation and Its Challenges for the Company 3.1. Introduction 3.2. General innovation policy: a vital issue, survival 3.3. Innovation: major sectoral issues

9 4 Financial Evaluation of an Innovation Project 4.1. Introduction 4.2. Costing 4.3. Judgment (goodwill) 4.4. Negotiation

10 5 Funding Innovation 5.1. Issues related to funding growth 5.2. Means of funding growth

11 6 Valorization of Innovation by Financial Markets 6.1. How to determine the expected return from innovative companies 6.2. Outperformance of innovative companies

12 7 Innovation and Credit Risk 7.1. Credit risk 7.2. Credit risk and rating agencies 7.3. Relationship between credit risk and innovation 7.4. Innovative companies less risky in the long-term? 7.5. Conclusion

13 8 Financial Innovation: Creating Value… or Risk? 8.1. Basic concepts of portfolio management 8.2. Risk-creating financial innovation?

14 Conclusion

15 References

16 Index

17 End User License Agreement

1 Chapter 5Table 5.1. Major barriers to innovationTable 5.2. Investments in millions of euros (source: “La finance participative 4...Table 5.3. LBO exit solutions by period of initial investment (source: Kaplan an...

2 Chapter 6Table 6.1. Top 20 most innovative U.S. firms and their industry (source: Bloombe...Table 6.2. Ranking based on annualized alpha of the 20 most innovative US compan...Table 6.3. Ranking based on annualized alpha of the 20 most innovative US compan...Table 6.4. Ranking based on annualized apha of the 20 most innovative US compani...Table 6.5. Ranking based on annualized alpha of the 20 most innovative U.S. comp...

3 Chapter 7Table 7.1. Rating tables of the main rating agencies (sources: Standard & Poor’s...

4 Chapter 8Table 8.1. Correlations between the S&P 500 and various so-called “alternative” ...

1 Chapter 1 Figure 1.1. Staircase. For a color version of this figure, see www.iste.co.uk/di... Figure 1.2. Target markets as a function of DNA. For a color version of this fig... Figure 1.3. From idea to final product. Product marketing action. For a color ve...

2 Chapter 3Figure 3.1. Survival rate of start-ups after one year of activity 1Figure 3.2. Survival rate of business start-ups by year of establishment 2. For a...Figure 3.3. Top 20 causes of start-up failure 3. For a color version of this figu...Figure 3.4. Life cycle of a product/service. For a color version of this figure,...

3 Chapter 5Figure 5.1. Variation in five-year survival rate by five characteristics 3. For a...Figure 5.2. Crowdfunding: funds raised by type. For a color version of this figu...Figure 5.3. Crowdfunding: statistics by project. For a color version of this fig...Figure 5.4. Investments by BAs in 2018 6. For a color version of this figure, see...Figure 5.5. Interest rates for new small business credit (%) 7. For a color versi...Figure 5.6. Relevance of different sources of financing for SMEs in the euro are...Figure 5.7. Assets under private market management (Bökberg et al. 2019). For a ...Figure 5.8. Comparison of equity market valuations and private funds (source: Mc...

4 Chapter 6Figure 6.1. Relationship between a share’s expected return (E(Ri)) and its risk ...Figure 6.2. Top 50 of BCG’s 2019 most innovative companies of BCG (source: Ringe...

5 Chapter 8Figure 8.1. Normal distributionFigure 8.2. Example of an efficient frontier calculated using Excel (source: Blo...Figure 8.3. Example of the variance and covariance matrix calculated using ExcelFigure 8.4. Efficient frontiers as a function of asset correlation (inspired by ...

1 Cover

2 Table of Contents

3 Title Page Innovation between Risk and Reward Set coordinated by Bernard Guilhon and Sandra Montchaud Volume 7

4 Copyright First published 2021 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc. Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address: ISTE Ltd 27-37 St George’s Road London SW19 4EU UK www.iste.co.uk John Wiley & Sons, Inc. 111 River Street Hoboken, NJ 07030 USA www.wiley.com © ISTE Ltd 2021 The rights of Christophe Dispas, Georges Kayanakis, Nicolas Servel and Ludmila Striukova to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. Library of Congress Control Number: 2021930258 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library ISBN 978-1-78630-066-9

5 Foreword

6 Introduction

7 Begin Reading

8 Index

9 End User License Agreement

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