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Please use this identifier to cite or link to this item: https://dspace.lboro.ac.uk/2134/587

Title: R&D investment, credit rationing and sample selection.
Authors: Atzeni, Gianfranco
Piga, Claudio
Keywords: Bivariate probit
Innovation
Selectivity
In-house R&D
Issue Date: Jun-2005
Abstract: We study whether R&D-intensive firms are liquidity-constrained, by also modeling their antecedent decision to apply for credit. This sample selection issue is relevant when studying a borrower-lender relationship, as the same factors can influence the decisions of both parties. We find firms with no or low R&D intensity to be less likely to request extra funds. When they do, we observe a higher probability of being denied credit. Such a relationship is not supported by evidence from the R&D-intensive firms. Thus, our findings lend support to the notion of credit constraints being severe only for a sub-sample of innovative firms. Furthermore, the results suggest that the way in which the R&D activity is organized may differentially affect a firms’ probability of being credit-constrained.
Description: This is a working paper.
URI: https://dspace.lboro.ac.uk/2134/587
Appears in Collections:Working Papers (Economics)

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