À繫¿¬±¸ Á¦ ±Ç È£ (2016³â 5¿ù)
Asian Review of Financial Research, Vol., No..
pp.1359~1395
pp.1359~1395
Corporate finance of Research vs Development
Jiyoon Lee Department of Finance, The George Washington University, Washington DC, USA
Jiyoung Park Graduate School of Business, Yonsei University, Seoul, South Korea
We compartmentalize R&D into R (research) and D (development), and investigate their association with important corporate financing decisions. We show that R is more positively associated with cash holdings than D, and that only R is sensitive to cash flows. These results are consistent with higher uncertainty and information asymmetry of R imposing more severe financial constraints relative to D. Supporting the financial constraint explanation, higher cash flows sensitivity of R is prominent among financially constrained firms. Consistent with D bearing product market risk, D is associated with higher cash holdings when product market competition is severe, but we do not find the same result for R. Lastly, we find negative association between leverage and R but not D.
Jiyoon Lee
Jiyoung Park
We compartmentalize R&D into R (research) and D (development), and investigate their association with important corporate financing decisions. We show that R is more positively associated with cash holdings than D, and that only R is sensitive to cash flows. These results are consistent with higher uncertainty and information asymmetry of R imposing more severe financial constraints relative to D. Supporting the financial constraint explanation, higher cash flows sensitivity of R is prominent among financially constrained firms. Consistent with D bearing product market risk, D is associated with higher cash holdings when product market competition is severe, but we do not find the same result for R. Lastly, we find negative association between leverage and R but not D.