nach oben

Small Business Economics

Erschienen in:

01.01.2011

R&D investment and financing constraints of small and medium-sized firms

verfasst von: Dirk Czarnitzki, Hanna Hottenrott

Erschienen in: Small Business Economics | Ausgabe 1/2011

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

This study tests for financial constraints on R&D investment and how they differ from capital investment. To identify constraints in the access to external capital, we employ a credit rating index. Our models show that internal constraints, measured by mark-ups, are more decisive for R&D than for capital investment. For external constraints, we find a monotonic relationship between the level of constriction and firm size for both types of investment. Thus, external constraints turn out to be more binding with decreasing firm size. On the contrary, we do not find such monotonic relationships for internal constraints. Differentiation by firms’ age does not support lower constraints for older firms.

Vorheriger Artikel A model to study the organizational culture of the family firm

Nächster Artikel Employment stability in newly founded firms: a matching approach using linked employer–employee data from Germany

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Nur mit Berechtigung zugänglich

Stein (2003) provides an overview on the body of literature on how asymmetric information and other agency problems influence corporate investment in general. While there is a large body of research on investment in physical assets, the special case of R&D investment is less thoroughly investigated.

The questionnaire changes every year, and unfortunately the years 1999 and 2000 cannot be used in this study as relevant variables were not part of the survey in these years.

R&D expenditure and capital investment are measured in million “Deutsche Mark” (1 DM ≈ 0.51 EUR).

It should be noted that we use an inverted version of the original rating index for easier interpretation of the estimated effects. The original index ranges from 100 to 600, where 600 represents the worst rating. We simply switch it around so that higher values of the regressor stand for an improved rating. Further, we divided the rating by 100 in the regression models.

We ran all regressions without adding R&D back to PCM. The results were basically identical to the ones reported below.

Acs, Z., & Audretsch, D. (1990). Innovation and small firms. Boston: MIT Press.

Alderson, M., & Betker, B. (1996). Liquidation costs and accounting data. Financial Management, 25(2), 25–36.CrossRef

Audretsch, D. (2006). Entrepreneurship, innovation, and economic growth. Chaltham: Edward Elgar Publishing.CrossRef

Audretsch, D., & Elston, J. A. (2002). Does firm size matter? Evidence on the impact of liquidity constraints on firm investment behavior in Germany. International Journal of Industrial Organization, 20, 1–17.CrossRef

Berger, A., & Udell, G. (2002). Small business credit availability and relationship lending: The importance of bank organizational structure. Economic Journal, 112, 32–53.CrossRef

Bhagat, S., & Welch, I. (1995). Corporate research and development investments -international comparisons. Journal of Accounting and Economics, 19, 443–470.CrossRef

Bond, S., Harhofff, D., & Van Reenen, J. (2006). Investment, R&D and financial constraints in Britain and Germany. Annales d’Économie et de Statistique, forthcoming.

Bougheas, S., Görg, H., & Strobl, E. (2003). Is R&D financially constrained? Theory and evidence from Irish manufacturing. Review of Industrial Organization, 22(2), 159–174.CrossRef

Carpenter, R., & Petersen, B. (2002). Capital market imperfections, high-tech investment, and new equity financing. The Economic Journal, 112, 54–72.CrossRef

Chiao, C. (2002). Relationship between Debt, R&D and physical investment, evidence from U.S. firm-level data. Applied Financial Economics, 12, 105–121.CrossRef

Chung, K., & Wright, P. (1998). Corporate policy and market value: A q-theory approach. Review of Quantitative Finance and Accounting, 11(3), 293–310.CrossRef

Collins, N. R., & Preston, L. E. (1969). Price-cost margins and industry structure. Review of Economics and Statistics, 51(3), 271–286.CrossRef

Czarnitzki, D. (2006). Research and development in small- and medium-sized enterprises: The role of financial constraints and public funding. Scottish Journal of Political Economy, 53(3), 257–335.CrossRef

Czarnitzki, D., & Kraft, K. (2004). Management control and innovative activity. Review of Industrial Organization, 24(1), 1–24.CrossRef

Czarnitzki, D., & Kraft, K. (2007). Are credit ratings valuable information? Applied Financial Economics, 17(13), 1061–1070.CrossRef

Czarnitzki, D., & Kraft, K. (2008). Capital control, debt financing and innovative activity. Journal of Economic Behavior and Organization, forthcoming.

Fazzari, S., Hubbard, R., & Petersen, B. (1988). Financing constraints and corporate investment. Brookings Papers on Economic Activity, 1988(1), 141–206.CrossRef

Fazzari, S., Hubbard, R., & Petersen, B. (2000). Investment-cash flow sensitivities are useful: A comment on kaplan and zingales. The Quarterly Journal of Economics, 115(2), 695–705.CrossRef

Fritsch, M., Brixy, U., & Falck, O. (2006). The effect of industry, region and time on new business survival––A multi-dimensional analysis. Review of Industrial Organization, 28, 285–306.CrossRef

Gompers, P., & Lerner, J. (1999). The venture capital cycle. Cambridge MA: MIT Press.

Greene, W. H. (2000). Econometric analysis (4th ed.). New Jersey: Prentice-Hall.

Hall, B. (1992). Research and development at the firm level: Does the source of financing matter? NBER Working Paper No. 4096.

Hall, B. (2002). The financing of research and development. Oxford Review of Economic Policy, 18(1), 35–51.CrossRef

Harhoff, D. (1998). Are there financing constraints for R&D and investment in German manufacturing firms? Annales d’Economie et de Statistique 49/50, pp. 421–456.

Himmelberg, C., & Peterson, B. (1994). R&D and internal finance: A panel study of small firms in high-tech industries. Review of Economics and Statistics, 76, 38–51.CrossRef

Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. American Economic Review, 76, 323–329.

Jensen, M. C. (1993). The modern industrial revolution, exit, and failure of internal control systems. Journal of Finance, 48, 831–880.CrossRef

Kaplan, S., & Zingales, L. (1997). Do investment-cash flow sensitivities provide useful measures of financing constraints? The Quarterly Journal of Economics, 112(1), 169–215.CrossRef

Kaplan, S., & Zingales, L. (2000). Investment-cash flow sensitivities are not valid measures of financing constraints. The Quarterly Journal of Economics, 115(2), 707–712.CrossRef

Licht, G., & Nerlinger, E. (1998). New technology-based firms in Germany: A survey of the recent evidence. Research Policy, 26, 1005–1022.CrossRef

Martinelli, C. (1997). Small firms, borrowing constraints, and reputation. Journal of Economic Behavior & Organization, 33, 91–105.CrossRef

Mulkay, B., Hall, B., & Mairesse, J. (2001). Investment and R&D in France and in the United States. In D. Bundesbank (Ed.), Investing today for the world of tomorrow. Germany: Springer Verlag.

Müller, E., & Zimmermann, V. (2008). The importance of equity finance for R&D activity––Are there differences between young and old companies? Small Business Economics, forthcoming.

Myers, S., & Majluf, N. (1984). Corporate financing and investment decisions when firms have information that investors do not. Journal of Financial Economics, 13, 187–221.CrossRef

OECD/Eurostat. (1997). OECD proposed guidelines for collecting and interpreting technological innovation data—Oslo manual. Paris: OECD.

Petersen, M., & Rajan, R. (1995). The effect of credit market competition on lending relationships: Evidence from small business data. Journal of Finance, 49, 3–37.CrossRef

Ravenscraft, D. J. (1983). Structure-profit relationships at the line of business and industry level. Review of Economics and Statistics, 65, 22–31.CrossRef

Ritter, J. (1991). The long-run performance of initial public offerings. Journal of Finance, 46, 3–27.CrossRef

Schumpeter, J. A. (1934). The theory of economic development. Cambridge: Harvard University Press.

Schumpeter, J. A. (1939). Business cycles: A theoretical, historical and statistical analysis of the capitalist process. New York: McGraw-Hill.

Schumpeter, J. A. (1942). Capitalism, socialism and democracy. New York: Harper and Row.

Stein, J. C. (2003). Agency information and corporate investment. In G. M. Constantinides, M. Harris, & R. M. Stulz (Eds.), Handbook of the economics of finance (Vol. 1A). Amsterdam: Elsevier North Holland.

Stulz, R. M. (1990). Managerial discretion and optimal financing policies. Journal of Financial Economics, 26, 3–27.CrossRef

Wissenschaftsstatistik GmbH im Stifterverband für die Deutsche Wirtschaft (eds) (1999). Forschung und Entwicklung in der Wirtschaft 1997–1999, Essen.

Wooldridge, J. M. (2002). Econometric analysis of cross section and panel data. Cambridge, Massachusetts: MIT Press.

Titel: R&D investment and financing constraints of small and medium-sized firms
verfasst von: Dirk Czarnitzki
Hanna Hottenrott
Publikationsdatum: 01.01.2011
Verlag: Springer US
Erschienen in: Small Business Economics / Ausgabe 1/2011
Print ISSN: 0921-898X
Elektronische ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-009-9189-3

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Wirtschaft"

Weitere Artikel der Ausgabe 1/2011

Teams developing business ideas: how member characteristics and conflict affect member-rated team effectiveness

Public knowledge, private knowledge: the intellectual capital of entrepreneurs

A model to study the organizational culture of the family firm

Entrepreneurship, job creation and wage growth

The survival and success of Canadian penny stock IPOs

Employment stability in newly founded firms: a matching approach using linked employer–employee data from Germany

Premium Partner