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Title:Financial Constraints: Routine Versus Cutting Edge R&D Investment PDF Logo
Authors:Binz, Hanna L.
Czarnitzki, Dirk
Issue Date:2008
Series/Report no.:ZEW Discussion Papers 08-005
Abstract:We analyze financial constraints for R&D, where we account for heterogeneity among investments which has been neglected in previous literature. According to economic theory, investments should be distinguished by their degree of uncertainty, e.g. routine R&D versus cutting-edge R&D. Financial constraints should be more binding for cutting-edge R&D than for routine R&D. Using panel data we find that R&D spending of firms devoting a significant fraction of R&D to cutting-edge projects is curtailed by credit constraints while routine R&D investments are not. This has important policy implications with respect to the distribution of R&D subsidies in the economy.
Subjects:R&D
Financial Constraints
Panel Data
JEL:O32
O31
Document Type:Working Paper
Appears in Collections:ZEW Discussion Papers
Publikationen von Forscherinnen und Forschern des ZEW

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