INNOVATION INVESTMENT: BEHAVIOUR OF CHINESE FIRMS TOWARDS FINANCING SOURCES

Muhammad Kaleem Khan, Ahmad Kaleem, Salman Zulfiqar and Umair Akram
Additional contact information
Muhammad Kaleem Khan: Department of Management Sciences, COMSATS University Islamabad (Sahiwal Campus), 57000, Pakistan
Ahmad Kaleem: Faculty of Business and Law, Central Queensland University (Melbourne Campus), 3000, Australia
Salman Zulfiqar: Department of Management Sciences, COMSATS University Islamabad (Sahiwal Campus), 57000, Pakistan
Umair Akram: Guanghua School of Management, Peking University, 100871, P. R. China

International Journal of Innovation Management (ijim), 2019, vol. 23, issue 07, 1-29

Abstract: Although the extant literature on corporate finance has largely focused on capital investments, relatively less attention has been paid to identify how research and development (R&D) related investments are financed. This study empirically tests the relationship between the different financing sources used by firms and their intensity of R&D in the rapidly growing economy of China. Furthermore, we posit that the firm’s choice to adopt the finance source for R&D will change if the firm is likely to be in financial constraints. This study finds out an empirical evidence that internally generated cash flows, bank debt, and seasonal public offerings (SPOs) stipulate a positive impact on R&D of Chinese firms, whereas the issuance of bond impacts it negatively. The study also confirms that financially constrained firms perceive the impact of financing sources on their R&D differently than non-financially constrained firms do. Results also slightly differ between high-tech and non-high-tech firms.

Keywords: Chinese economy; R&D; internal financing; external financing; managerial discretion; security issuance (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S1363919619500701
Access to full text is restricted to subscribers

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:wsi:ijimxx:v:23:y:2019:i:07:n:s1363919619500701

Ordering information: This journal article can be ordered from

DOI: 10.1142/S1363919619500701

Access Statistics for this article

International Journal of Innovation Management (ijim) is currently edited by Joe Tidd

More articles in International Journal of Innovation Management (ijim) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().