R&D and Firm Performance in a Transition Economy

Arbeitspapier

We estimate the effects of R&D on firms' credit ratings and on financial distress. The main purpose is the comparison of firms in Western Germany and Eastern Germany as a transitional economy. Innovative activity has a positive impact on firm value proxied by ratings in Western Germany, but a negative impact in Eastern Germany. We also consider future financial distress, and find that R&D in Eastern German firms leads to higher default risk, in contrast to Western Germany. There, R&D enhances future performance. This result is highly politically relevant, since the high level of subsidies present in Eastern Germany may be subject to misallocation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 06-033

Classification and Topics

• Classification: Wirtschaft ; Socialist Systems and Transitional Economies: Performance and Prospects ; Innovation and Invention: Processes and Incentives ; Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out ; Microeconomic Analyses of Economic Development ; Technological Change: Government Policy
• Subject: Transitional Economy ; Credit Rating ; Bankruptcy ; Innovation ; Policy ; Industrielle Forschung ; Unternehmensentwicklung ; Kreditwürdigkeit ; Konkurs ; Innovationspolitik ; Wirtschaftliche Anpassung ; Vergleich ; Alte Bundesländer ; Deutschland ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Czarnitzki, Dirk ; Kraft, Kornelius
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/24225
• Last update: 10.03.2025, 11:42 AM CET