Arbeitspapier
Investment, R&D and financial constraints in Britain and Germany
This paper tests for the importance of cash flow on investment in fixed capital and R&D using firm-level panel data in two countries between 1985 and 1994. For German firms, cash flow is not informative in simple econometric models of fixed investment or R&D. In identical pecifications for British firms, cash flow is informative about investment, although not about the level of R&D spending conditional on the R&D participation decision. In the UK, we also find that investment is less sensitive to cash flow for R&D-performing firms, and that cash flow predicts whether firms perform R&D or not. We confirm that these differences do not simply reflect a greater role for current cash flow in forecasting future sales. These results suggest that financial constraints are more significant in Britain, that they affect the decision to engage in R&D rather than the level of R&D spending by participants, and that consequently the British firms that do engage in R&D are a self-selected group where financing constraints tend to be less binding.
- Sprache
-
Englisch
- Erschienen in
-
Series: IFS Working Papers ; No. W99/05
- Klassifikation
-
Wirtschaft
Innovation and Invention: Processes and Incentives
Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
Oligopoly and Other Imperfect Markets
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Bond, Steve
Harhoff, Dietmar
Reenen, John Van
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute for Fiscal Studies (IFS)
- (wo)
-
London
- (wann)
-
1999
- DOI
-
doi:10.1920/wp.ifs.1999.9905
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Bond, Steve
- Harhoff, Dietmar
- Reenen, John Van
- Institute for Fiscal Studies (IFS)
Entstanden
- 1999