This paper is motivated by the hypothesis by Hall (1992) who claims that firms prefer to use debt to finance physical investment but not R&D, due to the risky nature of R&D. Employing a dynamic simultaneous approach and R&D Master File, the relationship between debt, R&D and physical investment is reestimated with the full sample and two sub-samples, including firms in all industries, in science-based industries, and in nonscience-based industries, respectively. First, the results show that the contemporary relationship between R&D and physical investment is positively reciprocal, particularly in science-based industries. That is, current R&D positively affects and is positively affected by current physical investment. Second, it is shown that, in (non-)science-based industries, current R&D (raises) lowers current debt and current physical investment raises current debt; and that current debt raises current physical investment and (raises) reduces R&D. In other words, the evidence supports that debt is a resource to finance both physical investment and R&D in nonscience-based industries, but debt is only a resource to finance physical investment but not R&D in science-based industries.

Employing comprehensive limit-order data which identify investor types, this paper examines the clustering pattern of limit-order prices. First, limit orders, particularly those submitted by individual investors (IIs), tend to cluster at integer and even prices. Second, nonmarketable limit-order prices cluster more than marketable limit-order prices, indicating that aggressive limit orders generally embed more information. Third, investors choosing even-priced limit orders are not penalized by lower execution ratios. Fourth, investors (particularly IIs) strategically exhibit front-running behavior. Fifth, price clustering indeed creates price barriers. Finally, the degree of price clustering using trade data is significantly underestimated, compared to that using limit-order data.

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