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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.

Suggested Citation

  • Ghosh, Saibal, 2012. "Does R&D intensity influence leverage? Evidence from Indian firm-level data," MPRA Paper 38945, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:38945
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    References listed on IDEAS

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    More about this item

    Keywords

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

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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