Unleash liquidity constraints or competitiveness potential: The impact of R&D grant on external financing on innovation

Artikel

This paper uses Korea's internal data on R&D programs to analyze how the receiving of R&D impacts the amount of subsequent external financing for technological innovation received by R&D firms. We address sample selection and endogeneity issues that arise when estimating the impact of R&D policy by utilizing a matching method using unique features of Korea's R&D grant programs. Our empirical results show that firms that receive R&D grants further receive 22%-32% less external financing compared to those who do not receive R&D grants, though there are some differences in the statistical significance of the results based on the specification of the regression model. This is consistent with the view that R&D grants reduce firms' liquidity constraints, or that government support effectively crowds out funding from the financial market.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: European Research on Management and Business Economics (ERMBE) ; ISSN: 2444-8834 ; Volume: 28 ; Year: 2022 ; Issue: 3 ; Pages: 1-10

Classification and Topics

• Classification: Management ; Firm Behavior: Empirical Analysis ; Fiscal Policies and Behavior of Economic Agents: Firm ; Management of Technological Innovation and R&D
• Subject: External financing ; Innovation policy ; Liquidity constraints ; R&D grant

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Moon, Byunggeor
• Event: Veröffentlichung
• (who): Elsevier
• (where): Amsterdam
• (when): 2022

Further information

• DOI: doi:10.1016/j.iedeen.2022.100195
• Last update: 10.03.2025, 11:41 AM CET