Financial Research · Valuation, Innovation, and Real Economy
This project develops a Growth Value Identification Model (GVIM) to explain how financial systems should identify and price emerging productive forces. Instead of relying on backward-looking financial indicators alone, the framework integrates financial value, growth potential, and strategic positioning. Using a panel dataset of leading U.S. and Chinese technology firms, the project shows that financial markets do not simply reward innovation or growth in isolation. Rather, they assign the strongest premium to firms that successfully convert innovation into scalable growth. The study further extends this finding into a three-layer mechanism of value identification, risk layering, and value co-creation, connecting financial pricing logic with real economic transformation.
How should financial systems evolve to identify, price, and support emerging productive forces in the real economy? The project argues that the key challenge is no longer capital allocation alone, but the ability of finance to recognize future productive capacity before it becomes visible in conventional balance sheets.
The core contribution of the project is the Growth Value Identification Model (GVIM): V = αF + βG + γS where F denotes financial fundamentals, G captures growth-based value, and S measures strategic positioning within industrial ecosystems. The growth dimension is further decomposed into technological capability, user expansion, data assets, and product iteration speed. To operationalize the framework, the empirical model maps growth factors into observable variables such as R&D expenditure, revenue growth, and the interaction between innovation and growth. This enables a direct test of whether financial markets correctly price emerging productive forces.
The framework shifts valuation logic from backward-looking financial metrics toward a growth-based pricing system that captures innovation, scalability, and strategic embeddedness.
The empirical section is based on an unbalanced panel dataset covering 15 leading technology and innovation-driven firms from the United States and China over 2016–2023. The key variables include: - MarketCap as the valuation proxy - R&D expenditure as innovation input - Revenue growth as scalability proxy - R&D × Growth as the interaction term representing innovation-growth synergy The baseline regression results show that: - R&D positively affects firm valuation - Revenue growth also positively affects firm valuation - The interaction between R&D and growth has the strongest explanatory power This suggests that financial markets assign a premium not to innovation or growth alone, but to firms capable of translating innovation into scalable growth. Cross-country regressions further show that U.S. markets exhibit stronger sensitivity to this synergy, while Chinese markets display a hybrid pricing logic influenced by both market growth signals and policy-driven strategic factors.
15 firms, U.S. + China, 2016–2023 panel data
R&D × Growth has the strongest explanatory power in firm valuation
Markets reward firms that convert innovation into scalable growth
The findings imply that financial systems must move from collateral-based, backward-looking assessment toward forward-looking value identification. Three policy implications stand out: 1. Build growth-based evaluation systems that incorporate innovation and scalability indicators. 2. Develop a multi-layer capital structure that matches risk across government funds, venture capital, and banks. 3. Strengthen value co-creation, so that finance acts not only as a capital provider but also as a strategic partner in industrial upgrading. In the Chinese context, this also means improving the market valuation of intangible assets and better aligning policy support with market-based capital allocation mechanisms.
This project ultimately argues that finance should no longer be understood merely as a mechanism for pricing the present. Its future function is to identify, price, and accelerate the productive forces of the future.