O’Connor, Matthew; Rafferty, Matthew; Sheikh, Aamer - In: Journal of Banking & Finance 37 (2013) 7, pp. 2510-2519
When financial market frictions exist, executives may have to decide which investment activities to reduce when internal funds decrease. Expenditures on research and development (R&D) may be particularly vulnerable because of the long-term nature of innovative activity. We find that equity...