Traditional and R&D Investments: are They really Different?

Paola Brighi () and Giuseppe Torluccio

Chapter 4 in New Issues in Financial Institutions Management, 2010, pp 59-87 from Palgrave Macmillan

Abstract: Abstract The aim of this chapter is to identify the different role of financial funds in traditional and R&D investments in Italian manufacturing firms using information from Capitalia’s latest Survey of Italian Firms. R&D, defined as a creative activity implemented to improve know-how and its utilization in new applications, is quite distinct because of its high rate of information opacity. Coherently with the asymmetric information theory, R&D thus implies that firms will have greater difficulty in finding external financial funding. The higher risk related to R&D projects could entail some form of financial constraint. However, signalling mechanisms such as self-financing could correct such a market imperfection.

Keywords: Cash Flow; Total Asset; Credit Rationing; Private Equity; Intangible Asset (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:pal:pmschp:978-0-230-29915-3_5

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230299153

DOI: 10.1057/9780230299153_5

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().