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Debt maturity and corporate R&D investment – the empirical study of US listed firms

Hai-Chin Yu, Professor, Department of International Business, Chung Yuan Christian University, Taoyuan City, Thi-Thanh Phan, Ph.D., College of Business, Chung Yuan Christian University, Taoyuan City
2018 Banks and Bank Systems  

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This study investigates the relationships between debt maturity structure and corporation R&D investment. Using a large sample of US listed firms over the period of 1995 to 2015, it was found that the use of bank debt positively influences R&D investment, whereas the use of public debt exerts a negative impact. However, the Sarbanes-Oxley Act (SOX) mitigates the information asymmetry such that the advantages of private information from banks shrunk. As a result, public debtholders
more » ... t more from the SOX and turn out to be positively influenced by the R&D investment after SOX. Moreover, bank debt impact on R&D spending reduces over the post-SOX. The results also find that the SOX influences the debt maturity on corporate R&D investment only for large corporations, the effects remain unchanged for small businesses.
doi:10.21511/bbs.13(4).2018.01 fatcat:vmjruqwrgjhvjhurx556c2o2ca
DOAJ
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Hai-Chin Yu, Professor, Department of International Business, Chung Yuan Christian University, Taoyuan City, Thi-Thanh Phan, Ph.D., College of Business, Chung Yuan Christian University, Taoyuan City. "Debt maturity and corporate R&D investment – the empirical study of US listed firms." Banks and Bank Systems 13.4 (2018) 1-16