The sensitivity of R&D investments to cash flows: Comparing young and old EU and US leading innovators

Michele Cincera, Julien Ravet and Reinhilde Veugelers

No 497091, Working Papers of Department of Management, Strategy and Innovation, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven

Abstract: Using firm level information on the world leading R&D investors and employing a system GMM estimation, this paper investigates how sensitive R&D investments are to cash flow movements, which would be suggestive of financial constraints. The analysis confirms that over the last decade the R&D investments of younger aged leading innovators appear to be more sensitive to cash flows compared to their older counterparts and that this holds particularly for EU younger aged leading innovators compared to their US counterparts, particularly in medium and high tech sectors.

Keywords: EU-US R&D gap; younger aged leading innovators; cash-flow sensitivity; R&D investments (search for similar items in EconPapers)
Date: 2015-05
Note: paper number MSI_1508
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Published in FEB Research Report

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https://lirias.kuleuven.be/retrieve/318929 MSI_1508 (application/pdf)

Related works:
Journal Article: The sensitivity of R&D investments to cash flows: comparing young and old EU and US leading innovators (2016)
Working Paper: The sensitivity of R&D investments to cash flows: comparing young and old EU and US leading innovators (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:msiper:497091

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