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Title: R&D investments and credit lines
Authors: Guney, Yilmaz
Karpuz, Ahmet
Ozkan, Neslihan
Keywords: R&D investment
Credit lines
Financial crises
Debt types
Issue Date: 2017
Publisher: © Elsevier
Citation: GUNEY, Y., KARPUZ, A. and OZKAN, N., 2017. R&D investments and credit lines. Journal of Corporate Finance, 46, pp. 261-283.
Abstract: Using data for 939 publicly listed firms from 17 European countries over the period from 2004 to 2013, we investigate the effect of used credit lines on R & D investments, controlling for other determinants of R & D investments, i.e., cash flows, cash holdings, sales growth, equity financing, and Tobin's Q. Our estimation results, based on the system-GMM method, show that used credit lines have a positive and significant impact on R & D investments. In addition, we find that this impact is more pronounced for small and young firms than for large and mature firms. These results show that firms use credit lines as part of their liquidity management tools for supporting their R & D investments. Finally, we provide evidence that European firms in bank-based countries increased their use of credit lines for financing their R & D investments during the financial crisis of 2007–2009, while the link between R & D investments and used credit lines became weaker during the European sovereign debt crisis of 2010–2013.
Description: This paper is closed access until 1st February 2019.
Version: Accepted for publication
DOI: 10.1016/j.jcorpfin.2017.07.011
URI: https://dspace.lboro.ac.uk/2134/26407
Publisher Link: https://doi.org/10.1016/j.jcorpfin.2017.07.011
ISSN: 0929-1199
Appears in Collections:Closed Access (Business School)

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