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

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  • Ghosh, Saibal

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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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38945.

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Date of creation: 17 Mar 2012
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Publication status: Published in Journal of International Entrepreneurship 2.10(2012): pp. 158-175
Handle: RePEc:pra:mprapa:38945

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Keywords: R&D intensity; leverage; Tobit model; India;

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