R&D Intensity and Corporate Financial Policy: Some International Evidence |
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Authors: | Rahim Bah,& Pascal Dumontier |
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Affiliation: | Groupe Ecole Supérieure de Commerce de Grenoble, France,;UniversitéPierre Mendè, France |
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Abstract: | This paper presents evidence on the financial policies of firms strongly engaged in research and development activities. By referring to the under-investment paradox, the asset substitution problem, the asset specificity proposition and the information asymmetry literature, we postulate that R&D-intensive firms should adopt specific financial policies. In conformity with our hypotheses, empirical results based on a sample of R&D-intensive and non-R&D firms in four major industrialized countries (Europe, the UK, Japan and the US) show that R&D-intensive firms exhibit significant lower debt and dividend payment levels, but shorter debt maturities and higher cash levels than non-R&D ones. |
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Keywords: | research and development information asymmetry agency theory corporate financial policy capital structure |
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