Capital structure decisions and R&D investment: The contingency role of firm size

IF 1.2 Q4 MANAGEMENT
Sarmad Ali, Adalberto Rangone, Hussain Muhammad
{"title":"Capital structure decisions and R&D investment: The contingency role of firm size","authors":"Sarmad Ali, Adalberto Rangone, Hussain Muhammad","doi":"10.1177/03063070241284895","DOIUrl":null,"url":null,"abstract":"This paper explores how the size of a firm influences the relationship between capital structure choices and research and development (R&D) investment. By analyzing data from publicly listed U.S. pharmaceutical firms between 2011 and 2020 and using an instrumental variables regression, we present evidence that the impact of capital structure on R&D investment varies depending on firm size. Our findings show that firm size plays a critical role in shaping financing decisions to support R&D. Specifically, large and small firms employ different strategies for developing and implementing R&D projects. Our results reveal that R&D investment is negatively (positively) and significantly associated with debt financing (equity financing). Moreover, we show that firm size attenuates the adverse effect of debt financing on R&D investment and accentuates the positive effect of equity financing. Our study provides a refined distinction between debt and equity financing and clarifies the importance of structural characteristics in explaining a firm’s R&D investment decisions. Our study assists policymakers and practitioners in designing effective policies to enhance the understanding of the complex relationship between capital structure decisions and R&D investment.","PeriodicalId":46142,"journal":{"name":"JOURNAL OF GENERAL MANAGEMENT","volume":null,"pages":null},"PeriodicalIF":1.2000,"publicationDate":"2024-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"JOURNAL OF GENERAL MANAGEMENT","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1177/03063070241284895","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"MANAGEMENT","Score":null,"Total":0}
引用次数: 0

Abstract

This paper explores how the size of a firm influences the relationship between capital structure choices and research and development (R&D) investment. By analyzing data from publicly listed U.S. pharmaceutical firms between 2011 and 2020 and using an instrumental variables regression, we present evidence that the impact of capital structure on R&D investment varies depending on firm size. Our findings show that firm size plays a critical role in shaping financing decisions to support R&D. Specifically, large and small firms employ different strategies for developing and implementing R&D projects. Our results reveal that R&D investment is negatively (positively) and significantly associated with debt financing (equity financing). Moreover, we show that firm size attenuates the adverse effect of debt financing on R&D investment and accentuates the positive effect of equity financing. Our study provides a refined distinction between debt and equity financing and clarifies the importance of structural characteristics in explaining a firm’s R&D investment decisions. Our study assists policymakers and practitioners in designing effective policies to enhance the understanding of the complex relationship between capital structure decisions and R&D investment.
资本结构决策与研发投资:公司规模的权变作用
本文探讨了企业规模如何影响资本结构选择与研发(R&D)投资之间的关系。通过分析 2011 年至 2020 年期间美国上市制药公司的数据,并使用工具变量回归法,我们提出了资本结构对研发投资的影响因公司规模而异的证据。我们的研究结果表明,企业规模对支持研发的融资决策起着至关重要的作用。具体来说,大型企业和小型企业在开发和实施研发项目时会采用不同的策略。我们的研究结果表明,研发投资与债务融资(股权融资)呈显著的负相关(正相关)。此外,我们还发现,企业规模减弱了债务融资对研发投资的不利影响,并增强了股权融资的积极影响。我们的研究对债务融资和股权融资进行了细化区分,并阐明了结构特征在解释企业研发投资决策方面的重要性。我们的研究有助于政策制定者和实践者设计有效的政策,以加强对资本结构决策与研发投资之间复杂关系的理解。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 求助全文
来源期刊
CiteScore
2.60
自引率
33.30%
发文量
18
期刊介绍: Journal of General Management is quarterly peer reviewed journal, with a mission to provide thought leadership by publishing articles on managerial practices with organisation-wide or cross-functional implications. We seek original theoretical and practical insights into general management in all types of organisations.
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
确定
请完成安全验证×
copy
已复制链接
快去分享给好友吧!
我知道了
右上角分享
点击右上角分享
0
联系我们:info@booksci.cn Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。 Copyright © 2023 布克学术 All rights reserved.
京ICP备2023020795号-1
ghs 京公网安备 11010802042870号
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术官方微信