Financial Constraints, R&D Investment, and the Value of Cash Holdings

Laurence Booth, Christos Ntantamis, Jun Zhou

Résultat de recherche: Articleexamen par les pairs

7 Citations (Scopus)

Résumé

Existing studies document that cash holdings are more valuable for financially constrained firms than for financially unconstrained firms. We investigate whether the relation between financial constraints and the value of corporate cash holdings varies across firms with different engagement in research and development activity. Among firms with R&D investment, the marginal value of cash is significantly higher for financially constrained firms than unconstrained ones, whereas this difference is weak among firms without R&D investment. Our findings are robust to alternative measures of financial constraints and alternative methods to define R&D intensity. Our study extends the cash literature by showing that the value of cash holdings is affected by the status of financial constraints and the nature of investment jointly.

Langue d'origineEnglish
Numéro d'article1550011
JournalQuarterly Journal of Finance
Volume5
Numéro de publication4
DOI
Statut de publicationPublished - déc. 1 2015

Note bibliographique

Publisher Copyright:
© 2015 World Scientific Publishing Company.

ASJC Scopus Subject Areas

  • Finance
  • Economics and Econometrics
  • Strategy and Management

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