Dynamic R&D Choice and the Impact of the Firms Financial Strength
نویسندگان
چکیده
This article investigates how a rms nancial strength a¤ects its dynamic decision to invest in R&D. We estimate a dynamic model of R&D choice using data for German rms in high-tech manufacturing industries. The model incorporates a measure of the rms nancial strength, derived from its credit rating, which is shown to lead to substantial di¤erences in estimates of the costs and expected long-run bene ts from R&D investment. Financially strong rms have a higher probability of generating innovations from their R&D investment, and the innovations have a larger impact on productivity and pro ts. Averaging across all rms, the long run bene t of investing in R&D equals 6.6 percent of rm value. It ranges from 11.6 percent for rms in a strong nancial position to 2.3 percent for rms in a weaker nancial position.
منابع مشابه
Firms’ Characteristics and Adjustment Speed of Dividend Payout Ratio: System-GMM and Differenced-GMM Approaches
Since paying over or not paying dividends can cause the firms to face financial crises, firms are always looking for discovery and using a target (optimal) dividend payout ratio. It should be noted that a dividend ratio is a dynamic number and a variety of factors affect it over time. The movement speed of the dividend payout ratio towards the target depends on several factors. This paper inves...
متن کاملResearch and Development Investment and Productivity Growth in Firms with Different Levels of Technology
I n the modern competitive world, Research and Development (R&D) and its overflowing technologies are the main basis of innovation, which in turn, can be determined as an important source of economic growth. Investing in research activities can help firms with different technological levels, especially high-tech industries to improve their productivity. This paper aims to analyze the...
متن کاملرتبه بندی شرکت ها بر اساس شاخص های مالی و بررسی رابطه آن با بازده سهام در بورس اوراق بهادار تهران
The importance of information in the field of stock returns predictions has promoted many researchers to follow and find the variables and the indexes which have significant relationship with stock returns. This information can be divided into two separate categories of financial and non-financial information. The final results obtained from several researches in this area confirm that both fin...
متن کاملAn Empirical Investigation of the Impact of Intellectual Capital on Firms’ Market Value and Financial Performance: Evidence from Iranian Companies
In modern economics, Intellectual capital is described as an intangible asset which can be used as a source of sustainable competitive advantage. However, intellectual capital components have to interact in themselves to create value. The paper seeks to examine the impact of intellectual capital on firms’ market value and financial performance. The efficiency of the value added by corporate int...
متن کاملThe Impact of Audit Committee and Its Characteristics on the Firms’ Information Environment
The present study aims at investigating the impact of the presence of audit committee and its characteristics on the corporate information environment. These characteristics include independence, financial expertise, size, and the gender of the audit committee. Although several methods have been discussed for measuring information environment in the accounting and finance literature, this resea...
متن کامل