Technology spillovers,asset redeployability and corporate financial policies |
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Authors: | Ambrus Kecskés Phuong-Anh Nguyen |
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Affiliation: | 1. Finance Area, Schulich School of Business, York University, Toronto, Canada;2. Finance Area, School of Administrative Studies, York University, Toronto, Canada |
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Abstract: | Prior research shows that technology spillovers across firms increase innovation, productivity and value. We study how firms finance their own growth stimulated by technology spillovers from their technological peer firms. We find that greater technology spillovers lead to higher leverage. This is the result of technology spillovers increasing asset redeployability, as evidenced by more collateralized borrowing and asset transactions. Borrowing costs also decrease. Exogenous variation in the research and development tax credits of other firms allows us to identify the causal effect of technology spillovers on a given firm. |
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Keywords: | asset redeployability capital structure cost of debt innovation technology spillovers |
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