Skip to main content

Financing behaviour of R&D investment in the emerging markets: the role of alliance and financial system.

Alam, A., Uddin, M. and Yazdifar, H., 2019. Financing behaviour of R&D investment in the emerging markets: the role of alliance and financial system. R & D Management, 49 (1), 21 - 32.

Full text available as:

[img]
Preview
PDF
R&DMGT_1.pdf - Accepted Version
Available under License Creative Commons Attribution Non-commercial.

396kB

DOI: 10.1111/radm.12303

Abstract

This paper examines the financing behaviour of research and development (R&D) investments in emerging markets. Drawing on institutional theory and using panel data of generalized methods of moment estimation for a sample of 302 firms from 20 countries during the period 2003–2015, we find that emerging market firms tend to use internal funds for financing R&D investments. Interesting results emerged when the sample was divided as alliance and non-alliance firms, and bank-based and market-based financial systems. The results show that R&D financing behaves differently for alliance and non-alliance firms. Alliance firms use both internal and external funds for R&D investments, while non-alliance firms do not use external funds. We also document that a country's financial system influences the choice of available sources of finance. Firms from countries that follow a bank-based financial system tend to rely on external funds while firms from countries that follow a market-based financial system depend more on internal funds for financing R&D investments. This study is important as it provides new evidence on financing R&D investments in emerging countries taking into account the institutional arguments of financing choices, and so should guide stakeholders about appropriate sources of R&D financing.

Item Type:Article
ISSN:0033-6807
Additional Information:Special Issue: Industry and International Aspects on R&D Management
Group:Faculty of Management
ID Code:33706
Deposited By: Unnamed user with email symplectic@symplectic
Deposited On:10 Mar 2020 10:45
Last Modified:10 Mar 2020 10:45

Downloads

Downloads per month over past year

More statistics for this item...
Repository Staff Only -