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R&D, Agency Costs and Capital Structure: International Evidence

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  • Sinclair Davidson
  • Robert Brooks

Abstract

We examine the impact of R&D intensity and agency costs on the value of firms across 13 economies. We find that R&D adds value while high agency costs reduce value. R&D adds value, however, even when agency costs are high. We show that in those firms where agency costs are high and R&D intensity is high the debt control hypothesis is at work. In contrast to the stylised fact of high R&D firms having low levels of debt, these firms have higher levels of deb

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society 2004 Australasian Meetings with number 59.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:ausm04:59

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Keywords: R&D; Agency Costs; Capital Structure;

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