Aghion, P.;
Bond, S.;
Klemm, A.;
Marinescu, I.;
(2004)
Technology and financial structure: are innovative firms different?
Journal of the European Economic Association
, 2
(2-3)
pp. 277-288.
10.1162/154247604323067989.
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Abstract
We use data on publicly traded U.K. firms to investigate whether financing choices differ systematically with R&D intensity. As well as looking at a balance sheet measure of the debt/assets ratio, we also consider the probability of raising finance by issuing new equity, and the shares of bank debt and secured debt in total debt. We find a nonlinear relationship with the debt/assets ratio: firms that report positive but low R&D use more debt finance than firms that report no R&D, but the use of debt finance falls with R&D intensity among those firms that report R&D. We find a simpler relationship with the probability of issuing new equity: Firms that report R&D are more likely to raise funds by issuing shares than firms that report no R&D, and this probability increases with R&D intensity. The shares of bank debt and secured debt in total debt are both lower for firms that report R&D compared to those that do not, and tend to fall as R&D intensity rises. We discuss possible explanations for these patterns.
| Type: | Article |
|---|---|
| Title: | Technology and financial structure: are innovative firms different? |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1162/154247604323067989 |
| Publisher version: | http://dx.doi.org/10.1162/154247604323067989 |
| Language: | English |
| Additional information: | © 2004 The MIT Press |
| Keywords: | Finance, financing, firm, R&D, shares, technology |
| UCL classification: | UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/17751 |
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