Abstract
We re-examine the effects of liquidity constraints on R & D investment. Inour theoretical section we extend the neoclassical framework of investmentin physical capital by introducing R & D and liquidity constraints. Weanalyse this issue empirically using firm-level data for R & D activemanufacturing firms in the Republic of Ireland. Our results provide evidencethat suggests that R & D investment is financially constrained. This is inline with previous studies of U.S. firms.
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Bougheas, S., Görg, H. & Strobl, E. Is R & D Financially Constrained? Theory and Evidence from Irish Manufacturing. Review of Industrial Organization 22, 159–174 (2003). https://doi.org/10.1023/A:1022905102446
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DOI: https://doi.org/10.1023/A:1022905102446