R&D Subsidies and Firms’ Cost of Debt

Hanna Hottenrott and Sarah Demeulemeester

VfS 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: G30 L26 O31 O38 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-ino, nep-ppm and nep-sbm
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: R&D subsidies and firms’ cost of debt (2015)
Working Paper: R&D subsidies and firms' cost of debt (2015)
Working Paper: R&D subsidies and firms' cost of debt (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168093

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