Technology and Financial Structure: Are Innovative Firms Different?

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Technology and Financial Structure: Are Innovative Firms Different?

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Title: Technology and Financial Structure: Are Innovative Firms Different?
Author: Marinescu, Ioana; Klemm, Alexander; Bond, Stephen; Aghion, Philippe

Note: Order does not necessarily reflect citation order of authors.

Citation: Aghion, Philippe, Stephen Bond, Alexander Klemm, and Ioana Marinescu. 2004. Technology and financial structure: Are innovative firms different? Journal of the European Economic Association 2(2-3): 277-288.
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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.
Published Version: http://dx.doi.org/10.1162/154247604323067989
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:3200323

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  • FAS Scholarly Articles [6929]
    Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University
 
 

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