R&D and Internal Finance: A Panel Study of Small Firms in High-Tech Industries
Since Joseph Schumpeter, economists have argued that internal finance should be an important determinant of R&D expenditures. Yet almost without exception, previous empirical studies have not found evidence of such a relation. Using newly available data, the authors investigate this puzzle with a panel of 179 small firms in high-tech industries. Under each estimation strategy they employ, the authors find an economically large and statistically significant relationship between R&D investment and internal finance. Their results are consistent with the view that, because of capital market imperfections, the flow of internal finance is the principal determinant of the rate at which small, high-tech firms acquire technology through R&D. Copyright 1994 by MIT Press.
Volume (Year): 76 (1994)
Issue (Month): 1 (February)
|Contact details of provider:|| Web page: http://mitpress.mit.edu/journals/|
|Order Information:||Web: http://mitpress.mit.edu/journal-home.tcl?issn=00346535|
When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:76:y:1994:i:1:p:38-51. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristin Waites)
If references are entirely missing, you can add them using this form.