Journal of Financial Economics Vol. 124 No. 2 2017
Financial dependence and innovation: The case of public versus private firms
Abstract
In this paper, we examine the relation between innovation and a firm’s financial dependence using a sample of privately held and publicly traded US firms. We find that public firms in external finance dependent industries spend more on research and development and generate a better patent portfolio than their private counterparts. However, public firms in internal finance dependent industries do not have a better innovation profile than private firms. The results are robust to various empirical strategies that address selection bias. The findings indicate that the influence of public listing on innovation depends on the need for external capital.
- DOI
- 10.1016/j.jfineco.2016.02.010
- Volume
- 124
- Issue
- 2
- Pages
- 223-243
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref