Technology Spillovers, Asset Redeployability, and Corporate Financial Policies

Asian Development Bank Institute (ADBI) working paper 1259

Reprinted in Harnessing Digitalization for Sustainable Economic Development: Insights for Asia, John Beirne and David G. Fernandez, eds., Asian Development Bank Institute, 2022

54 Pages Posted: 8 Jan 2018 Last revised: 4 Apr 2022

See all articles by Phuong-Anh Nguyen

Phuong-Anh Nguyen

York University

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 growth stimulated by technology spillovers from their technological peer firms. We find that greater technology spillovers lead to higher leverage. This 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; Capital structure; Asset redeployability; Cost of debt

JEL Classification: G12, G31, G32, G33, G34, O31, O33

Suggested Citation

Nguyen, Phuong-Anh and Kecskes, Ambrus, Technology Spillovers, Asset Redeployability, and Corporate Financial Policies (July 28, 2016). Asian Development Bank Institute (ADBI) working paper 1259, Reprinted in Harnessing Digitalization for Sustainable Economic Development: Insights for Asia, John Beirne and David G. Fernandez, eds., Asian Development Bank Institute, 2022, Available at SSRN: https://ssrn.com/abstract=3097104 or http://dx.doi.org/10.2139/ssrn.3097104

Phuong-Anh Nguyen

York University

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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