Financial markets, financial dependence, and the allocation of capital

Pang, Jiaren; Wu, Haibin

doi:10.1016/j.jbankfin.2008.09.015

Cited by 39 publications

(25 citation statements)

References 23 publications

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“…This identification strategy was first proposed by Rajan and Zingales (1998) and has been used in numerous studies (e.g. Nunn 2007, Manova 2009, Pang and Wu 2009). In combination with R&D intensities the approach has been used by Maskus, Neumann, and Seidel (2011) to estimate the influence of financial development.…”

Section: Empirical Strategy and Predictionsmentioning

confidence: 99%

Contract enforcement and R&D investment

Seitz

Watzinger

2017

Research Policy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in EconStor may Contract Enforcement and R&D InvestmentMichael Seitz and Martin Watzinger * February 2013 Abstract:In this article we study the relation between the quality of contract enforcement and R&D investment across countries and industries. If companies invest successfully in R&D they are open for exploitation by their supplier if supply contracts are not enforceable. This hold-up problem can reduce the incentive to invest in R&D exante. In line with this theoretical idea we find in the empirical analysis that R&D investment increases with the quality of the judicial system. This effect is particularly strong in industries which rely more on contracts to acquire input and in which it is harder to vertically integrate.

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Section: Empirical Strategy and Predictionsmentioning

confidence: 99%

Contract enforcement and R&D investment

Seitz

Watzinger

2017

Research Policy

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“…Strong domestic demand (only partially financed by FDI and net portfolio investment), productivity-adjusted wage growth relative to trading partners and the net foreign asset balances of commercial banks (due to the fact that banks became net external debtors) have highlighted the need for demand restraint to improve the saving-investment balance and slow down the debt accumulation of the private sector after 2006 (Pang and Wu 2009).…”

Section: Empirical Analysis: Empirical Literature Overview Data Specmentioning

confidence: 99%

The macroeconomic sources of systemic risk in the banking sectors of five new EU member states

Festić

Kavkler

Repina

2011

Journal of Banking & Finance

155

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“…A growing empirical literature finds that measures of the degree of stock market development are positively correlated with economic growth (see Levine (2005) for a survey). In particular, Beck and Levine (2004) find that stock market development has an economically large impact on growth, and Wurgler (2000) and Pang and Wu (2009) find that countries with better developed financial markets (including stock markets) are better at reallocating capital from declining sectors to growing industries.…”

Section: Related Literaturementioning

confidence: 99%

Public entrants, public equity finance and creative destruction

Brown

Petersen

2010

Journal of Banking & Finance

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a b s t r a c tWe explore the importance of new public firms and public equity finance for R&D and creative destruction in the US high-tech sector. Over 1900 new public firms enter high-tech manufacturing between 1970 and 2004; they are increasingly R&D intensive and rely extensively on public equity finance in the 1980s and 1990s. We estimate dynamic R&D models and find a strong link between public equity finance and R&D for new entrants, but not established entrants or incumbents. Further, recent cohorts of public entrants have a substantial economic impact: by 2000, recent public entrants account for almost half of high-tech sales and more than half of R&D. Variation in the availability of public equity finance has a marked impact on entrant R&D and the rate at which entrants take market share from incumbents. Our findings identify a key channel through which public equity markets facilitate the process of creative destruction.

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Financial markets, financial dependence, and the allocation of capital

Cited by 39 publications

References 23 publications

Contract enforcement and R&D investment

Contract enforcement and R&D investment

The macroeconomic sources of systemic risk in the banking sectors of five new EU member states

Public entrants, public equity finance and creative destruction

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