Banking Crises, Financial Constraints, and Innovation

초록

This paper examines the relationship between financial constraints and innovation with panel data for exchange-listed manufacturing firms across 32 countries over the time period of 1994 through 2012. We explore the effects of corporate financial constraint on innovation under banking crises. Firms with low debt, high long-term debt, and high equity turn out to increase research and development (R&D) expenditure during banking crises. Also, cash holdings appear to determine R&D expenditure in the sample without banking crisis experiences.

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