This paper examines the impact of innovation on future profitability and stock returns. We first replicate and confirm the findings of Hirshleifer et al. (2018) in the U.S. setting. Consistent with Hirshleifer et al. (2018) we find that innovation is associated with: (1) higher and more persistent profitability suggesting that more innovative firms are able to maintain a competitive advantage and (2) positive future stock returns suggesting mispricing of innovation in current share prices. When we extend these analyses to the Australian setting we continue to find that innovative firms experienced sustained profitability but unlike Hirshleifer et al. (2018) we find no evidence of mispricing. We argue that the general paucity of innovation in Australia and the two-tier registration system which allows investors to differentiate between the quality of patents, enable Australian investors to better price innovation.

本文研究了创新对未来盈利能力和股票回报的影响。我们首先复制并确认Hirshleifer等人的发现。（2018）在美国设置。与Hirshleifer等一致。（2018）我们发现创新与以下方面相关：（1）更高和更持久的盈利能力表明更多创新的公司能够保持竞争优势;（2）未来股票收益为正值表明创新对当前股价的定价错误。当我们将这些分析扩展到澳大利亚时，我们继续发现创新型公司经历了持续的盈利能力，但与Hirshleifer等人不同。（2018），我们没有发现定价错误的证据。