Has cash holding been able to smoothed corporate R&D?—An empirical research based on perspective of financing constraints and financial development

Abstract

Abstract: Based on the perspective of R&D smoothing, this paper examined the economic consequences of cash holdings combined with financial development and the nature of government control. The results show that the corporate cash holdings have smoothed R&D expenditure, and this smooth effect is more obvious in firms which face more serious financing constraints. Besides, compared with the government controlled firms, the smooth effect is more significant in private firms. With the improvement of the financial development, the smooth effect of cash holdings will decrease, at the same time, the difference between the state-owned and non-state-owned firms is also reduced. From the perspective of R&D smoothing effect, this paper provides empirical evidence for the specific channels that realizing the strategic effect of cash holdings, and provides new evidence for the relationship between financial development and economic growth at the micro aspect, and it also enriches the related research on the economic consequences of Chinese credit allocation pattern.

Key words: financial development, cash holdings, R&D smoothing, financing constraints

CLC Number:

F275.1

Yang Xingquan, Zeng Yi. Has cash holding been able to smoothed corporate R&D?—An empirical research based on perspective of financing constraints and financial development[J]. Science Research Management, 2014, 35(7): 107-115.

References

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