Technology Spillovers, Asset Redeployability, and Corporate Financial Policies

49 Pages Posted: 8 Jan 2018 Last revised: 30 May 2018

See all articles by Phuong-Anh Nguyen

Phuong-Anh Nguyen

York University - Schulich School of Business

Ambrus Kecskes

York University - Schulich School of Business

Date Written: July 28, 2016

Abstract

Prior research shows that technology spillovers across firms increase innovation, productivity, and value. We study how firms finance their own investment and growth stimulated by technology spillovers from their technological peer firms. We find that greater technology spillovers lead to higher leverage. Furthermore, we find that this effect is the result of technology spillovers increasing asset redeployability, as evidenced by more collateralized borrowing and asset transactions. Borrowing costs also decrease. Exogenous variation in the R&D tax credits of other firms allows us to identify the causal effect of technology spillovers on a given firm.

Keywords: Innovation; Technology spillovers; Research and development; Financial policies; Capital structure; Asset redeployability; Cost of debt

JEL Classification: G12, G14, G21, G31, G32, G33, G34, O31, O32, O33, O34

Suggested Citation

Nguyen, Phuong-Anh and Kecskes, Ambrus, Technology Spillovers, Asset Redeployability, and Corporate Financial Policies (July 28, 2016). Available at SSRN: https://ssrn.com/abstract=3097104 or http://dx.doi.org/10.2139/ssrn.3097104

Phuong-Anh Nguyen

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

Ambrus Kecskes (Contact Author)

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

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