Munich Personal RePEc Archive

Does R&D intensity influence leverage? Evidence from Indian firm-level data

Ghosh, Saibal (2012): Does R&D intensity influence leverage? Evidence from Indian firm-level data. Published in: Journal of International Entrepreneurship , Vol. 10, No. 2 (May 2012): pp. 158-175.

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Abstract

The paper examines the association between corporate leverage and their investment in R&D. Towards this end, it develops certain testable propositions. These propositions are tested using a dataset of manufacturing firms in India covering the period 1995-2005. The estimates support the fact that firms which make high efforts on R&D investments exhibit lower leverage ratios. Additionally, the estimates reveal that the dampening effect of R&D-intensity on leverage is the highest for foreign private firms. For state-owned firms however, R&D activity appears to be positively associated with leverage.

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