Hitting the gas or the brake? Recessions and firms' knowledge investments

Eirik Sjåholm Knudsen and Lasse B. Lien

Managerial and Decision Economics, 2019, vol. 40, issue 8, 1000-1015

Abstract: Purpose We examine how firms alter their investment behavior in response to changes in demand and access to credit during recessions. We compare and contrast investment changes in physical assets, R&D, and human capital. Findings We find that firms tend to shield R&D investments from transitory fluctuations in demand and that R&D investments are more sensitive to credit changes than usually assumed. For human capital, we find a cubic relationship between investments and demand changes. Conclusion Important variation and trade‐offs remain hidden if investment is treated as a single category or if the distinction between demand and credit impulses is not made.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1002/mde.3086

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:40:y:2019:i:8:p:1000-1015

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().