Financing Innovation and Growth: Cash Flow, External Equity, and the 1990s R&D Boom
The financing of R&D provides a potentially important channel to link finance and economic growth, but there is no direct evidence that financial effects are large enough to impact aggregate R&D. U.S. firms finance R&D from volatile sources: cash flow and stock issues. We estimate dynamic R&D models for high-tech firms and find significant effects of cash flow and external equity for young, but not mature, firms. The financial coefficients for young firms are large enough that finance supply shifts can explain most of the dramatic 1990s R&D boom, which implies a significant connection between finance, innovation, and growth. Copyright (c) 2009 The American Finance Association.
Year of publication: |
2009
|
---|---|
Authors: | BROWN, JAMES R. ; FAZZARI, STEVEN M. ; PETERSEN, BRUCE C. |
Published in: |
Journal of Finance. - American Finance Association - AFA, ISSN 1540-6261. - Vol. 64.2009, 1, p. 151-185
|
Publisher: |
American Finance Association - AFA |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Financing innovation and growth : cash flow, external equity, and the 1990s R&D boom
Brown, James R., (2009)
-
The temporary shutdown decision : Lessons from the Great Recession
Brown, James R., (2019)
-
Brown, James R., (2009)
- More ...