Mr Md Ashraful Alam M.A.Alam@salford.ac.uk
Lecturer
Financing behavior of R&D investments in the emerging markets : the role of alliance and financial system
Alam, MA; Uddin, MM; Yazdifar, H
Authors
MM Uddin
H Yazdifar
Abstract
This paper examines the financing behaviour of R&D investments in emerging markets. Drawing on institutional theory and using panel data of generalized methods of moment (GMM) 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.
Citation
Alam, M., Uddin, M., & Yazdifar, H. (2019). Financing behavior of R&D investments in the emerging markets : the role of alliance and financial system. R&D Management, 49(1), 21-32. https://doi.org/10.1111/radm.12303
Journal Article Type | Article |
---|---|
Acceptance Date | Nov 2, 2017 |
Online Publication Date | Dec 8, 2017 |
Publication Date | Jan 1, 2019 |
Deposit Date | Nov 14, 2017 |
Publicly Available Date | Dec 8, 2019 |
Journal | R&D Management |
Print ISSN | 0033-6807 |
Electronic ISSN | 1467-9310 |
Publisher | Wiley |
Volume | 49 |
Issue | 1 |
Pages | 21-32 |
DOI | https://doi.org/10.1111/radm.12303 |
Publisher URL | http://dx.doi.org/10.1111/radm.12303 |
Related Public URLs | http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9310 |
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