Corporate governance and R&D investment: the role of debt financing.

Autor: Muhammad, Hussain, Migliori, Stefania, Mohsni, Sana
Předmět:
Zdroj: Industrial & Corporate Change; Jun2022, Vol. 31 Issue 3, p628-653, 26p, 9 Charts, 3 Graphs
Abstrakt: This paper examines the role of debt financing in the relationship between corporate governance and research and development (R&D) investment using a sample of publicly traded U.S. pharmaceutical firms from 2009 to 2018. The results show a positive and significant association between corporate governance mechanisms (such as board size, board independence, board gender diversity, and ownership concentration) and R&D investment and a negative and significant association between debt financing and R&D investment. In addition, we show that debt financing plays a moderating role and a partial mediating role in the relationship between corporate governance mechanisms and R&D investment. Specifically, debt financing attenuates the negative effect of board size on R&D investment and accentuates the positive effect of ownership concentration on R&D investment. Our study helps to shed light on a close and complex relationship existing between the firm's choices of corporate governance, debt financing, and R&D investments, which the previous literature has so far examined in a partial and fragmented way. To ensure effective R&D investment, firms need to consider the effect of debt financing on corporate governance decisions. [ABSTRACT FROM AUTHOR]
Databáze: Complementary Index
Externí odkaz:
Nepřihlášeným uživatelům se plný text nezobrazuje