Campus Units

Finance

Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

7-16-2013

Journal or Book Title

The Journal of Finance

Volume

68

Issue

4

First Page

1517

Last Page

1549

DOI

10.1111/jofi.12040

Abstract

We study a broad sample of firms across 32 countries and find that strong shareholder protections and better access to stock market financing lead to substantially higher long-run rates of R&D investment, particularly in small firms, but are unimportant for fixed capital investment. Credit market development has a modest impact on fixed investment but no impact on R&D. These findings connect law and stock markets with innovative activities key to economic growth, and show that legal rules and financial developments affecting the availability of external equity financing are particularly important for risky, intangible investments not easily financed with debt.

Comments

This is an accepted manuscript of an article from The Journal of Finance, 2013 68(4); 1517-1549. DOI: 10.1111/jofi.12040. Posted with permission.

Copyright Owner

John Wiley & Sons, Inc

Language

en

File Format

application/pdf

Published Version

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