Corporate research & development investments international comparisons

Abstract This paper explores the determinants of corporate R&D for U.S., Canadian, British, European, and Japanese firms. We find last year's debt ratio is significantly negatively correlated with current R&D expenditures for U.S. firms, and positively for Japanese firms. Second, we document a significant positive relation between two-year lagged stock return and current R&D expenditures for U.S., European, Japanese, and large-size British firms. Finally, we find a significant positive relation between last year's tax payments and current R&D expenditures for Japanese firms, and a significant negative relation for medium-size and small-size U.S. firms.

[1]  Paula R. Worthington.  Investment, cash flow, and sunk costs , 1995 .

[2]  Toni M. Whited.  Debt, liquidity constraints, and corporate investment: evidence from panel data , 1992 .

[3]  R. Barro,et al.  The Stock Market and Investment , 1989 .

[4]  S. Prowse,et al.  Institutional investment patterns and corporate financial behavior in the United States and Japan , 1990 .

[5]  L. Summers.  Taxation and Corporate Investment: A q-Theory Approach , 1981 .

[6]  Richard Schmalensee,et al.  R and D Cooperation and Competition , 1990 .

[7]  Dale W. Jorgenson,et al.  Econometric Studies of Investment Behavior: A Survey , 1971 .

[8]  Jerold B. Warner,et al.  On financial contracting: An analysis of bond covenants , 1979 .

[9]  J. Stiglitz,et al.  Credit Rationing in Markets with Imperfect Information , 1981 .

[10]  A. Shleifer,et al.  The Stock Market Investments: Is the Market a Sideshow? , 1990 .

[11]  Z. Griliches.  The Search for R&D Spillovers , 1991 .

[12]  James A. Brickley,et al.  Stock-Based Incentive Compensation, Asymmetric Information and Investment Behaviour , 1991 .

[13]  J. Poterba,et al.  Dividend Taxes, Corporate Investment, and "Q" , 1981 .

[14]  James A. Brickley,et al.  Stock-based incentive compensation and investment behavior , 1993 .

[15]  C. Mayer.  Financial Systems, Corporate Finance and Economic Development , 1990 .

[16]  Sudipto Bhattacharya,et al.  Innovation and Communication: Signalling with Partial Disclosure , 1983 .

[17]  Zvi Griliches,et al.  R&D, Patents, and Productivity , 1981 .

[18]  David A. Aaker,et al.  Myopic management behavior with efficient, but imperfect, financial markets: A comparison of information asymmetries in the U.S. and Japan☆ , 1993 .

[19]  Fumio Hayashi,et al.  TOBIN'S MARGINAL q AND AVERAGE q: A NEOCLASSICAL INTERPRETATION , 1982 .

[20]  Boyan Jovanovic,et al.  Externalities and Growth Accounting , 1989 .

[21]  Bronwyn H Hall,et al.  The Impact of Corporate Restructuring on Industrial Research and Development , 1989, Brookings Papers on Economic Activity. Microeconomics.

[22]  J. Schumpeter,et al.  Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process , 1940 .

[23]  M. Katz,et al.  R&D Cooperation and Competition , 1990 .

[24]  F. Hayashi.  Corporate finance side of the Q theory of investment , 1985 .

[25]  R&D, investment and industry dynamics , 1992 .

[26]  Andrew B. Abel.  Investment and the Value of Capital , 1979 .

[27]  S. Myers.  Determinants of corporate borrowing , 1977 .

[28]  Hayne E. Leland,et al.  INFORMATIONAL ASYMMETRIES, FINANCIAL STRUCTURE, AND FINANCIAL INTERMEDIATION , 1977 .

[29]  D. Scharfstein,et al.  Bank Monitoring and Investment: Evidence from the Changing Structure of Japanese Corporate Banking Relationships , 1989 .

[30]  Bronwyn H Hall.  Investment and Research and Development at the Firm Level: Does the Source of Financing Matter? , 1992 .

[31]  Simon Kuznets,et al.  Modern Economic Growth: Rate, Structure, and Spread , 1967 .

[32]  D. Scharfstein,et al.  The Role of Banks in Reducing the Costs of Financial Distress in Japan , 1990 .

[33]  D. Miles,et al.  Asymmetric Information, Corporate Finance, and Investment. , 1991 .

[34]  P. Romer.  Endogenous Technological Change , 1989, Journal of Political Economy.

[35]  Jeffrey K. MacKie-Mason.  Do Firms Care Who Provides Their Financing? , 1989 .

[36]  Mark Schankerman,et al.  Dynamics of R & D and Investment in the Scientific Sector , 1989, Journal of Political Economy.

[37]  D. T. Wright,et al.  International tax summaries : a guide for planning and decisions , 1982 .

[38]  H. White.  A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity , 1980 .

[39]  Financing Constraints and Corporate Investment , 1988 .