Dynamic R&D choice and the impact of the firm's financial strength

Arbeitspapier

This article investigates how a firm's financial strength affcts its dynamic decision to invest in R&D. We estimate a dynamic model of R&D choice using data for German firms in high-tech manufacturing industries. The model incorporates a measure of the firm's financial strength, derived from its credit rating, which is shown to lead to substantial differences in estimates of the costs and expected long-run benefits from R&D investment. Financially strong firms have a higher probability of generating innovations from their R&D investment, and the innovations have a larger impact on productivity and profits. Averaging across all firms, the long run benefit of investing in R&D equals 6.6 percent of firm value. It ranges from 11.6 percent for firms in a strong financial position to 2.3 percent for firms in a weaker financial position.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: ZEW Discussion Papers ; No. 15-083

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Innovation and Invention: Processes and Incentives ; Management of Technological Innovation and R&D ; Corporate Finance and Governance: General
• Thema: R&D choice ; Financial strength ; Innovation ; Productivity ; Dynamic structural model

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Peters, Bettina ; Roberts, Mark J. ; Vuong, Van Anh
• Ereignis: Veröffentlichung
• (wer): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (wo): Mannheim
• (wann): 2015

Weitere Informationen

• Handle: http://hdl.handle.net/10419/125456
• URN: urn:nbn:de:bsz:180-madoc-401788
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ