Financing constraints and R&D investments of large corporations in Europe and the USA

Michele Cincera and Julien Ravet ()
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Julien Ravet: Solvay Brussels School of Economics and Management, Université Libre de Bruxelles

No 2010-03, JRC Working Papers on Corporate R&D and Innovation from Joint Research Centre

Abstract: This paper explores the existence and importance of financing constraints for R&D investments in large EU and US manufacturing companies over the 2000 2007 period. The main results obtained by estimating error-correction equations suggest that the sensitivity of R&D investments to cash flow variations are important for European firms while US ones do not appear to be financially constrained. In terms of policy implications, these results suggest improving the conditions for access to external capital to finance R&D activities in the EU.

Keywords: Financial constraints; R&D investments; error-correction investment equations; system GMM panel data econometric models (search for similar items in EconPapers)
JEL-codes: C23 E22 O31 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2010-04
New Economics Papers: this item is included in nep-eur and nep-ino
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Citations: View citations in EconPapers (42)

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https://publications.jrc.ec.europa.eu/repository/handle/JRC56505 (application/pdf)

Related works:
Journal Article: Financing constraints and R&D investments of large corporations in Europe and the US (2010)
Working Paper: Financing constraints and R&D investments of large corporations in Europe and the US (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ipt:wpaper:201003

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