R&D investment, credit rationing and sample selection

Claudio A. Piga, Gianfranco Atzeni

Research output: Contribution to journalArticlepeer-review

46 Citations (Scopus)


We study whether R&D-intensive firms are liquidity constrained, by modelling their antecedent decision to apply for credit. This sample selection issue is relevant when studying a borrower-lender relationship, as the same factors can influence the decisions of both parties. We find firms with no or low R&D intensity to be less likely to request extra funds. When they do, we observe a higher probability of being denied credit. Such a relationship is not supported by evidence from the R&D-intensive firms. Thus, our findings lend support to the notion of credit constraints being severe only for a sub-sample of innovative firms. Furthermore, the results suggest that the way in which the R&D activity is organized may differentially affect a firm's probability of being credit constrained. 2007 The Authors. Journal compilation

Original languageEnglish
Pages (from-to)149-178
Number of pages30
JournalBulletin of Economic Research
Issue number2
Publication statusPublished - 1 Apr 2007
Externally publishedYes


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