Abstract
Management research has a rich history devoted to understanding how different types of equity holders facilitate effective governance of investment in research and development (R&D). But scant research exists on understanding how different types of debt effectively govern R&D investment and virtually no research exists on this topic across institutional contexts. Yet, similar types of transactions differ across institutional contexts. This study develops and tests a transactional-institutional fit view of debt governance of R&D investment, grounded in transaction cost economics, which examines the alignment or fit between bank loan debt, bond debt, and R&D investment in bank-based and market-based countries. Analyses of 7943 firms across 12 countries from 1997-2010 support the key proposition: in bank-based (market-based) countries, higher levels of bank loan debt coupled with higher levels of R&D investment increase (decrease) firm performance.
| Original language | English |
|---|---|
| Pages (from-to) | 3478-3486 |
| Number of pages | 9 |
| Journal | Journal of Business Research |
| Volume | 69 |
| Issue number | 9 |
| DOIs | |
| State | Published - 1 Sep 2016 |
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 9 Industry, Innovation, and Infrastructure
Keywords
- Bank-based system
- Corporate governance
- Institutional context
- Market-based system
- R&D investment
- Transaction cost economics
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