R&D investment, Credit Rationing and Sample Selection
Gianfranco Atzeni and
Claudio Piga
Discussion Paper Series from Department of Economics, Loughborough University
Abstract:
We study whether R&D-intensive firms are liquidity-constrained, by also modeling their antecedent decision to apply for credit. This sample selection issue is relevant when studying a borrower-lender relationship, as the same factors can influence the decisions of both parties. We find firms with no or low R&D intensity to be less likely to request extra funds. When they do, we observe a higher probability of being denied credit. Such a relationship is not supported by evidence from the R&D-intensive firms. Thus, our findings lend support to the notion of credit constraints being severe only for a sub-sample of innovative firms. Furthermore, the results suggest that the way in which the R&D activity is organized may differentially affect a firms’ probability of being credit-constrained.
Keywords: Bivariate Probit; Innovation; selectivity; in-house R&D. (search for similar items in EconPapers)
JEL-codes: D45 E51 G21 G32 (search for similar items in EconPapers)
Date: 2005-06, Revised 2005-06
New Economics Papers: this item is included in nep-ent, nep-fin, nep-fmk, nep-mac and nep-mic
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Citations: View citations in EconPapers (33)
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Related works:
Journal Article: R&D INVESTMENT, CREDIT RATIONING AND SAMPLE SELECTION (2007) 
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