Investment and Research and Development at the Firm Level: Does the Source of Financing Matter? / Bronwyn H. Hall.

Format:

Book

Author/Creator:

Hall, Bronwyn H.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4096.

NBER working paper series no. w4096

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Investment and Research and Development at the Firm Level

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1992.

Summary:

The elasticity of investment and R&D investment with respect to cash flow is unambiguously positive in a large panel of U.S. manufacturing firms from 1973 to 1987. even with proper controls for permanent differences across firms and for simultaneity. I argue that the evidence favors liquidity constraints rather than just demand effects as the cause of this finding. Other results are that debt is not favored as a form of finance for R&D-intensive firms; leverage ratios and R&D investment are strongly negatively correlated across firms and this is not accounted for by differences in corporate taxation. Finally, the contemporaneous relationship between changes in debt levels and investment which I have previously documented (Hall 1990b and Hall 1991) is one of simultaneity, and apparently transitory, unlike the relationship between cash flow and investment.

Notes:

Print version record

June 1992.