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R&D Subsidies and Firms’ Cost of Debt

Hanna Hottenrott () and Sarah Demeulemeester

Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: Information asymmetry and outcome uncertainty increase the cost of debt for R&D. This study shows that recipients of public R&D grants face lower costs of debt. Immediate effects suggest that quality certification explains this observation. For younger ventures certification is accompanied by liquidity effects. Short-term effects stem from grants for research. In addition, longer-term liquidity effects point to grants facilitating young firms’ investments in R&D that advance project maturity.

JEL-codes: O31 O38 L26 G30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino, nep-ppm and nep-sbm
Date: 2017
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https://www.econstor.eu/bitstream/10419/168093/1/VfS-2017-pid-2190.pdf (application/pdf)

Related works:
Working Paper: R&D subsidies and firms’ cost of debt (2015) Downloads
Working Paper: R&D subsidies and firms' cost of debt (2015) Downloads
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