Bovha Padilla, Simona
[VerfasserIn]
;
Damijan, Jože P.
[Sonstige Person, Familie und Körperschaft];
Konings, Jozef
[Sonstige Person, Familie und Körperschaft]
Financial Constraints and the Cyclicality of R&D Investment
Erschienen in:LICOS Discussion Paper ; No. 239/2009
Umfang:
1 Online-Ressource (17 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.1414262
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 2009 erstellt
Beschreibung:
This paper uses firm level data to show how R&D investment responds to shocks in sales growth in credit constrained firms. A credit constrained firm has to rely on its cash flow and borrowing capacity to survive its short-run liquidity shock when hit by a negative shock. This reduces the possibility for further borrowing in order to invest in non-tangible long term R&D, hence a negative shock should hit R&D investments more in firms that are more credit constrained.We find that in financially constrained firms sales growth is positively associated with R&D investment, suggesting procyclical behavior of R&D investment in credit constrained firms. In contrast, we find that in firms with no financial constraints R&D investment is negatively correlated with sales growth, suggesting countercyclical behavior of R&D, consistent with the Schumpeterian idea of restructuring.Furthermore, we find that the firm level response in R&D investment to sales growth is stronger in firms that are more financially dependent, such as firms that are no part of a multinational, firms not receiving subsidies or firms with less collateral