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journal contribution
posted on 2017-09-07, 12:10 authored by Yilmaz Guney, Ahmet Karpuz, Neslihan OzkanUsing data for 939 publicly listed firms from 17 European countries over the period from 2004 to 2013, we investigate the effect of used credit lines on R & D investments, controlling for other determinants of R & D investments, i.e., cash flows, cash holdings, sales growth, equity financing, and Tobin's Q. Our estimation results, based on the system-GMM method, show that used credit lines have a positive and significant impact on R & D investments. In addition, we find that this impact is more pronounced for small and young firms than for large and mature firms. These results show that firms use credit lines as part of their liquidity management tools for supporting their R & D investments. Finally, we provide evidence that European firms in bank-based countries increased their use of credit lines for financing their R & D investments during the financial crisis of 2007–2009, while the link between R & D investments and used credit lines became weaker during the European sovereign debt crisis of 2010–2013.
History
School
- Business and Economics
Department
- Business
Published in
Journal of Corporate FinanceVolume
46Pages
261 - 283Citation
GUNEY, Y., KARPUZ, A. and OZKAN, N., 2017. R&D investments and credit lines. Journal of Corporate Finance, 46, pp. 261-283.Publisher
© ElsevierVersion
- AM (Accepted Manuscript)
Publisher statement
This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/Acceptance date
2017-07-28Publication date
2017-08-01Notes
This paper was accepted for publication in the journal Journal of Corporate Finance and the definitive published version is available at https://doi.org/10.1016/j.jcorpfin.2017.07.011ISSN
0929-1199Publisher version
Language
- en