Template-type: ReDIF-Paper 1.0
Author-Name: Mohnen, Pierre
Author-Email: p.mohnen@merit.unimaas.nl
Author-Workplace-Name: UNU-MERIT and University of Maastricht
Author-Name: Tiwari, Amaresh
Author-Email: a.tiwari@ke.unimaas.nl
Author-Workplace-Name: University of Maastricht 
Author-Name: Palm, Franz
Author-Email: f.palm@KE.unimaas.nl
Author-Workplace-Name: University of Maastricht
Author-Name: Schim van der Loeff, Sybrand
Author-Email: s.loeff@ke.unimaas.nl
Author-Workplace-Name: University of Maastricht
Title: Financial Constraint and R&D Investment: Evidence from CIS 
Abstract: Using direct information on financial constraints from questionnaires, 
	 rather than the commonly used balance sheet information, this paper 
	 presents evidence that, controlling for traditional factors as size, 
	 market share, cooperative arrangement, and expected profitability, 
	 financial constraints affect a firm's decision of how much to invest in 
	 R&D activities. Apart from these constraints, other hampering factors as 
	 market uncertainty and institutional bottlenecks, regulations and 
	 organizational rigidities also affect R&D investment. A semiparametric 
	 estimator of sample selection is employed to control for potential 
	 endogeneity of the regressors. The paper also shows that old firms and 
	 firms that belong to a group are less financially constrained when it 
	 comes to undertaking R&D activities. For the estimation a semiparametric 
	 binary choice model is used.
Classification-JEL: O32, G11, G32
Keywords: Research and Development, Investment, Financial Risk
Series: UNU-MERIT Working Papers
Creation-Date: 2007
Number: 011
File-URL: http://www.merit.unu.edu/publications/wppdf/2007/wp2007-011.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2007011