Technology and Financial Structure: Are Innovative Firms Different?
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 b...
| Main Authors: | , , , |
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| Format: | Journal article |
| Language: | English |
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MIT Press
2004
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| _version_ | 1797059801852674048 |
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| author | Aghion, P Bond, S Klemm, A Marinescu, I |
| author_facet | Aghion, P Bond, S Klemm, A Marinescu, I |
| author_sort | Aghion, P |
| collection | OXFORD |
| description | 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. |
| first_indexed | 2024-03-06T20:09:18Z |
| format | Journal article |
| id | oxford-uuid:2a059a4e-75b4-4ded-966b-940fb6eca231 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T20:09:18Z |
| publishDate | 2004 |
| publisher | MIT Press |
| record_format | dspace |
| spelling | oxford-uuid:2a059a4e-75b4-4ded-966b-940fb6eca2312022-03-26T12:22:29ZTechnology and Financial Structure: Are Innovative Firms Different?Journal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:2a059a4e-75b4-4ded-966b-940fb6eca231EnglishDepartment of Economics - ePrintsMIT Press2004Aghion, PBond, SKlemm, AMarinescu, IWe 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. |
| spellingShingle | Aghion, P Bond, S Klemm, A Marinescu, I Technology and Financial Structure: Are Innovative Firms Different? |
| title | Technology and Financial Structure: Are Innovative Firms Different? |
| title_full | Technology and Financial Structure: Are Innovative Firms Different? |
| title_fullStr | Technology and Financial Structure: Are Innovative Firms Different? |
| title_full_unstemmed | Technology and Financial Structure: Are Innovative Firms Different? |
| title_short | Technology and Financial Structure: Are Innovative Firms Different? |
| title_sort | technology and financial structure are innovative firms different |
| work_keys_str_mv | AT aghionp technologyandfinancialstructureareinnovativefirmsdifferent AT bonds technologyandfinancialstructureareinnovativefirmsdifferent AT klemma technologyandfinancialstructureareinnovativefirmsdifferent AT marinescui technologyandfinancialstructureareinnovativefirmsdifferent |