Financing R&D Spending: The Role of Corporate Cash Holdings

Research and development (R&D) investment and productivity growth have long been recognized as central drivers of economic growth. Yet innovation is inherently difficult to finance externally: It is intangible, risky and subject to severe asymmetric information. As a result, firms with higher R&D intensity—R&D expenditures divided by total assets—tend to hold a larger share of their assets in cash.1
Read more...

;