The Effects of R&D Investment and Firm Size on Growth Opportunities of Newly Listed Firms
Author | : Salim Chahine |
Publisher | : |
Total Pages | : 26 |
Release | : 2007 |
ISBN-10 | : OCLC:1290321227 |
ISBN-13 | : |
Rating | : 4/5 (27 Downloads) |
Book excerpt: Using data for 831 IPO firms listed from 1986 to 1998 in the UK, France, Germany and Italy, this paper investigates the inter-relationships between Ramp;D and growth opportunities in different national systems of corporate governance. Results indicate that growth opportunities are positively related to Ramp;D investments, and negatively related to financial leverage and firm size. Growth opportunities are also negatively related to the interaction between financial leverage and Ramp;D investments, particularly countries with weak minority shareholder protection, such as Germany, Italy and France. Further, a positive effect of the interaction between leverage and Ramp;D activities is greater in larger UK firms, but negative in smaller UK firms. The interaction of leverage and Ramp;D has a negative effect on growth in small firms and this is stronger in continental Europe than in the UK.