Financial Constraints and the Cyclicality of R&D Investment: Evidence from Slovenia

Arbeitspapier

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 tfirm 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. Furthfirmore, 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.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: LICOS Discussion Paper ; No. 239

Klassifikation und Themen

• Klassifikation: Wirtschaft
• Thema: R&D investment ; financial constraints ; cyclicality ; Forschungskosten ; Verschuldungsrestriktion ; Konjunktur ; Slowenien

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Bovha-Padilla, Simona ; Damijan, Joze P. ; Konings, Jozef
• Ereignis: Veröffentlichung
• (wer): Katholieke Universiteit Leuven, LICOS Centre for Institutions and Economic Performance
• (wo): Leuven
• (wann): 2009

Weitere Informationen

• Handle: http://hdl.handle.net/10419/75038
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ