Title: R & D and Internal Finance: A Panel Study of Small Firms in High-Tech Industries
Abstract:Since Joseph Schumpeter, economists have argued that internal finance should be an important determinant of R&D expenditures. Yet almost without exception, previous empirical studies have not found ev...Since Joseph Schumpeter, economists have argued that internal finance should be an important determinant of R&D expenditures. Yet almost without exception, previous empirical studies have not found evidence of such a relation. Using newly available data, the authors investigate this puzzle with a panel of 179 small firms in high-tech industries. Under each estimation strategy they employ, the authors find an economically large and statistically significant relationship between R&D investment and internal finance. Their results are consistent with the view that, because of capital market imperfections, the flow of internal finance is the principal determinant of the rate at which small, high-tech firms acquire technology through R&D. Copyright 1994 by MIT Press.Read More
Publication Year: 1994
Publication Date: 1994-02-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 1287
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot