Debt, R&D Investment and Technological Progress: A Panel Study of Japanese Manufacturing Firms in the 90s

39 Pages Posted: 21 Jun 2004

See all articles by Kazuo Ogawa

Kazuo Ogawa

Osaka University - Institute of Social and Economic Research (ISER)

Date Written: June 2004

Abstract

Based on a panel data set of Japanese manufacturing firms in research-intensive industries, we investigate quantitatively the extent to which debt outstandings in the 90s affected the firm's R&D activities. We find that massive debt outstandings had significantly negative effect on R&D investment in the 90s. We also find that investment on R&D was closely linked to the firm-level total factor productivity growth in the 90s. In fact, ten-percentage-point increase of debt-asset ratio lowered the firm-level total factor productivity growth rate by 0.72 percentage point for 1999-2001 by way of withering R&D activities.

Keywords: R&D Investment, Debt, Total factor productivity

JEL Classification: D21, D24, O32

Suggested Citation

Ogawa, Kazuo, Debt, R&D Investment and Technological Progress: A Panel Study of Japanese Manufacturing Firms in the 90s (June 2004). Available at SSRN: https://ssrn.com/abstract=557064 or http://dx.doi.org/10.2139/ssrn.557064

Kazuo Ogawa (Contact Author)

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan
+81 6 6879 8570 (Phone)

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