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Are There Financing Constraints for R&D and Investment in German Manufacturing Firms?

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Harhoff, D. (2000). Are There Financing Constraints for R&D and Investment in German Manufacturing Firms? In D. Encaoua, B. H. Hall, F. Laisney, & J. Mairesse (Eds.), The Economics and Econometrics of Innovation (pp. 399-434). Boston/Dordrecht/London: Kluwer.

Cite as: https://hdl.handle.net/11858/00-001M-0000-0019-B9BD-A
Using a newly constructed panel dataset of German enterprises, I estimate R&D and capital investment equations for the time period from 1990 to 1994. Simple accelerator specifications indicate considerable sensitivity of R&D and investment to cash flow for relatively small firms. Much of this effect vanishes once error-correcting behavior is taken into account, but a significant positive relationship between cash flow and investment remains for relatively small firms. In the case of R&D, weak but significant cash flow effects persist both for small and large firms. The evidence from Euler equationi estimates is not conclusive. The investment Euler equation for large firms appears to perform relatively well and yields results close to those expected under the null hypothesis of no financing constraints. The estimates from the Euler equation for R&D are not informative. Additional evidence from survey data suggests that the cash flow sensitivity of investment in small firms is likely to reflect financing constraints. /// À partir d'un panel d'entreprises allemandes nouvellement construit, j'ai estimé des équations d'investissement en R&D et en capital pour la péroide 1990 à 1994. Les spécifications de type "accélérateur" suggèrent une grande sensibilité de l'investissement en R&D par rapport au cash flow pour les petites entreprises. Une partie de ces effets disparaissent lorsqu'une spécification "à erreurs corrigées" est retenue, mais une relation significativement positive entre cash flow et investissement persiste pour les petites entreprises. Pour la R&D, I'impact du cash-flow est faible mais significatif pour les petites et les grandes entreprises. Les résultats obtenus à partir des équations d'Euler sont plus ambigus. Pour les grandes entreprises, les résultats obtenus indiquent une absence de contraintes financières. Les estimations de I'équation d'Euler pour la R&D ne sont toutefois pas très informatives. L'utilisation additionnelle de données d'enquête indique que I'investissement des petites entreprises est sujet à des contraintes financières.