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...

This paper explores the existence and importance of financing constraints for R&D investments in large EU and US manufacturing companies over the 2000-2007 period. The main results obtained by estimating error-correction equations suggest that the sensitivity of R&D investments to cash flow...