Does corporate R&amp;D investment support to decrease of default probability of Asian firms?

Cherkasova, Victoria; Kurlyanova, Alena

doi:10.1016/j.bir.2019.07.009

Cited by 14 publications

(13 citation statements)

References 31 publications

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“…Companies in Indonesia generally still use a small amount of debt to fund R&D investment, on average funding still uses their own funds because there is still relatively little allocation of funds for R&D and the lack of R&D expenditure data obtained from manufacturing companies in Indonesia. These results are in accordance with research which states that R&D expenditures significantly reduce the probability of default (Cherkasova & Kurlyanova, 2019).…”

Section: Figure 2 Roc Curvesupporting

confidence: 92%

“…The study by examining the effect of R & D expenditures on company performance resulted that R & D spending was not significant in influencing company performance, in this case ROA (Buchdadi et al, 2018). Most companies finance R & D from debt, for that there needs to be a test of its effect on the probability of default, tests that have been carried out have shown that R & D is proven to have a significant effect on the probability of default (Cherkasova & Kurlyanova, 2019). The results of this study provided room for R & D as an important variable to research, so the hypothesis is determined as follows: H3a: R & D affects Default Probability H3b: R & D affects Default Probability mediated the Current Ratio This conceptual framework will describe more clearly the relationship between variables, where the audit committee variable and managerial ownership in governance and the R & D variable effect the probability of default through the current ratio as the mediating variable.…”

Section: B Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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Analysis of the Effect of Governance and Research and Development on Probability of Default

Nuraini

Leon

Usman

2020

IJSOC

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Research on the probability of default is always very interesting because it is related to the goals of companies that want to live on, this study aims to examine and analyze which variables are important in this study consisting of the audit committee and managerial ownership who are members of governance, as well as the R & D variables. In influencing the probability of default either directly or indirectly by using the mediating variable Current Ratio estimated results (CRh), to predict the probability of default. This study uses Multiple Discriminant Analysis (MDA) in determining the value of the default probability, while the estimation analysis uses two-stage regression. The regression estimation results conclude that the governance variable on the audit committee has no direct effect on the probability of default, while the CRh mediation becomes significant. The managerial ownership variable which is part of the governance variable has a significant effect both directly and indirectly through CRh mediation, as well as the R&D variable which also has a significant effect on the probability of default either directly or indirectly. This study produces a model in which CRh as a mediator can signal the probability of default on non-financial variables such as governance and R&D. The results of this study contribute to early detection of the probability of default of any non-financial variables that affect both governance and R&D. This model was developed to anticipate the occurrence of bankruptcy by detecting the probability of default by using non-financial variables with CRh as mediation which is supported by model tests with Hosmer-Lemeshow and ROC.

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Section: Figure 2 Roc Curvesupporting

confidence: 92%

Section: B Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Analysis of the Effect of Governance and Research and Development on Probability of Default

Nuraini

Leon

Usman

2020

IJSOC

View full text Add to dashboard Cite

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“…However, ( Vassalou & Xing, 2004 ) introduced an iterative methodology of using equity prices to derive market value and volatility in assets at the firm level. This has been used by many studies like ( Afzal & Mirza, 2012 ; Cherkasova & Kurlyanova, 2019 ; Denzler, Dacorogna, Müller, & McNeil, 2006 ; Mirza, Rahat, & Reddy, 2016 ). Although various extensions of ( Merton, 1974 ) have been proposed, but recent comparative studies like ( Afik, Arad, & Galil, 2016 ) demonstrate that the original model still outperforms its common variants.…”

Section: Empirical Strategy For Solvency Assessment and Policy Responmentioning

confidence: 99%

Impact of Covid-19 on corporate solvency and possible policy responses in the EU

Mirza

Rahat

Naqvi

et al. 2023

The Quarterly Review of Economics and Finance

138

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Highlights A decline of market capital from Covid-19 will increase the default likelihood. The mining, construction and retail sectors are most vulnerable to market shock. Given a moderate deterioration in economic profile, a tax deferral is sufficient. For exacerbating shocks, debt and equity support is essential to avoid a meltdown.

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“…• Firm size was measured by the natural log of the firm's asset (Cherkasova & Kurlyanova, 2019;Chi et al, 2019). Generally, large firms possess more resources (financial, skilled works, innovation expertise, and marketing skills) than small firms.…”

Section: Control Variablesmentioning

confidence: 99%

Heterogenic institutional investors and their influence on corporate innovation: Evidence from a transition economy

Ali

Khan

Yang

et al. 2021

South African Journal of Business Management

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Purpose: The literature lacks a specific mechanism that may help to explain the variation in corporate innovation. This research helps to explain a specific mechanism that affects corporate innovation.Design/methodology/approach: Ordinary Least Square (OLS) regression has been used to analyse the data collected from Chinese manufacturing firms listed on Shenzhen and Shanghai Stock Exchanges from 2007 to 2015. Innovation input has been measured through research and development (RD) expense scaled by total assets, while the number of forward invention patent citations has been used to measure the quality of innovation performance.Findings/results: The results show that pressure-resistance institutional investors (PR institutions) encourage, while pressure-sensitive institutional investors (PS institutions) discourage RD intensity. Additionally, exploring the efficiency logic, results show that PR institutions positively moderate both in SOEs (state-owned enterprises) and non-SOEs, while in contrast, PS institutions negatively moderate only in non-SOEs. Overall, the results support our argument that institutional investors’ business relations act as a mechanism that affects not only their fiduciary responsibilities, but also their proneness to pressure which in turn affects corporate innovation.Practical implications: There is a great need to protect institutional investors from forming business relations with firms in which they invest. This strategy will help institutional investors to perform their valuable role in enhancing corporate innovation.Originality/value: The article contributes to the existing literature by highlighting institutional investors’ heterogenic behaviour. Second, this research highlights institutional investors’ business relations, which affect RD intensity and innovation performance.

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Does corporate R&D investment support to decrease of default probability of Asian firms?

Cited by 14 publications

References 31 publications

Analysis of the Effect of Governance and Research and Development on Probability of Default

Analysis of the Effect of Governance and Research and Development on Probability of Default

Impact of Covid-19 on corporate solvency and possible policy responses in the EU

Heterogenic institutional investors and their influence on corporate innovation: Evidence from a transition economy

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