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Does R&D intensity influence leverage? Evidence from Indian firm-level data

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  • Saibal Ghosh

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Abstract

The paper examines the association between corporate leverage and their investment in R&D. Towards this end, it develops certain testable propositions. These propositions are tested using a dataset of manufacturing firms in India covering the period 1995-2005. The estimates support the fact that firms which make high efforts on R&D investments exhibit lower leverage ratios. Additionally, the estimates reveal that the dampening effect of R&D-intensity on leverage is the highest for foreign private firms. For state-owned firms however, R&D activity appears to be positively associated with leverage.

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File URL: http://hdl.handle.net/10.1007/s10843-012-0087-4
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Bibliographic Info

Article provided by Springer in its journal Journal of International Entrepreneurship.

Volume (Year): 10 (2012)
Issue (Month): 2 (June)
Pages: 158-175

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Handle: RePEc:kap:jinten:v:10:y:2012:i:2:p:158-175

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Web page: http://www.springerlink.com/link.asp?id=112039

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Keywords: R&D intensity; Leverage; Tobit model; Financial crisis; India; E22; E44;

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