R&D Investment and Financing Constraints of Small and Medium-Sized Firm

Dirk Czarnitzki and Hanna L. Binz
Authors registered in the RePEc Author Service: Hanna Hottenrott

No 08-047, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: This study tests for financial constraints on R&D investment and how they differ from capital investment. To identify constraints in the access to external capital, we employ a credit rating index. Our models show that internal constraints, measured by mark-ups, are more decisive for R&D than for capital investment. For external constraints, we find a monotonic relationship between the level of constriction and firm size for both types of investment. Thus, external constraints turn out to be more binding with decreasing firm size. On the contrary, we do not find such monotonic relationships for internal constraints. Differentiation by firms? age does not support lower constraints for older firms.

Keywords: R&D Investment; Capital Investment; Financial Constraints; Panel Data; Censored Regression Models (search for similar items in EconPapers)
JEL-codes: O31 O32 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-bec, nep-ent, nep-ino, nep-mic, nep-ppm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Related works:
Journal Article: R&D investment and financing constraints of small and medium-sized firms (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:7357

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