What matters more in R&D and Capital Expenditures Financing by Japanese Firms:Multinationality or Bank Affiliation?
AbstractIn this paper, we investigate the relation between cash flow, debt, investment and performance according to whether the firm is multinational (versus domestic), keiretsu (versus independent) or both multinational and keiretsu. Using a Japanese sample of 3024 firm-year observations in the period 2000 to 2002, the results shed lights on the association between financing, investment and performance in the Japanese context. First, they suggest that cash flow is the principal source of financing of both tangible and intangible investment. Second, we find that firms which are both multinational and keiretsu are the most constrained ones regarding capital investments. Finally, for both multinational and domestic firms, bank affiliation alters the relationship between R&D and performance as well as between capital investment and performance.
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Bibliographic InfoPaper provided by Université de Bourgogne - Leg (laboratoire d'économie et de gestion)/Fargo (Research center in Finance,organizational ARchitecture and GOvernance) in its series Working Papers FARGO with number 1090103.
Length: 22 pages
Date of creation: Jan 2009
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Find related papers by JEL classification:
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- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
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