GEP Research Paper 01/16
Is R&D Financially Restrained? Theory and Evidence from Irish Manufacturing
S. Bougheas, H. Görg and E. Strobl
This paper was subsequently published in the Review of Industrial Organization, Vol.22, No.2, 2003, pp.159-174.
Abstract
We re-examine the effects of liquidity constraints on R&D investment. In our theoretical section we extend the neoclassical framework of investment in physical capital by introducing R&D and liquidity constraints. We analyse this issue empirically using firm-level data for R&D active manufacturing firms in the Republic of Ireland. Our results provide evidence that R&D investment is financially constrained which is in line with previous studies of US firms.
Issued in August 2001.
This paper is available in PDF format .