Liquidity, innovation and growth

Berentsen, Aleksander; Breu, Mariana Rojas; Shi, Shouyong

doi:10.1016/j.jmoneco.2012.10.005

Cited by 25 publications

(14 citation statements)

References 59 publications

(34 reference statements)

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“…Our study complements Berentsen et al. () in the following ways. First, they consider a simple innovation process in the form of knowledge capital accumulation that does not feature creative destruction and the business‐stealing effect that are important elements of the Schumpeterian growth theory.…”

Section: Introductionsupporting

confidence: 80%

“…This article also relates to a recent study by Berentsen et al. (), who provide an interesting search‐theoretic analysis of money and innovation. Specifically, they consider a search‐and‐matching process in the innovation sector and introduce a channel through which inflation affects innovation activities.…”

Section: Introductionmentioning

confidence: 77%

“…Second, although the search‐and‐matching framework in Berentsen et al. () represents a useful and elegant microfoundation of the CIA constraint on R&D, our reduced‐form modelling of CIA constraints allows us to provide a tractable analysis of the interesting interaction between the various CIA constraints on R&D, consumption, and manufacturing.…”

Section: Introductionmentioning

confidence: 99%

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R&D AND ECONOMIC GROWTH IN A CASH‐IN‐ADVANCE ECONOMY

Chu

Cozzi

2014

Int Economic Review

173

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R&D investment has well-known liquidity problems, with potentially important consequences.In this paper, we analyze the e¤ects of monetary policy on economic growth and social welfare in a Schumpeterian model with cash-in-advance (CIA) constraints on consumption, R&D investment, and manufacturing. Our results are as follows. Under the CIA constraints on consumption and R&D (manufacturing), an increase in the nominal interest rate would decrease (increase) R&D and economic growth. So long as the e¤ect of cash requirements in R&D is relatively more important than in manufacturing, the nominal interest rate would have an overall negative e¤ect on R&D and economic growth as documented in recent empirical studies. We also analyze the optimality of Friedman rule and …nd that Friedman rule can be suboptimal due to a unique feature of the Schumpeterian model. Speci…cally, we …nd that the suboptimality or optimality of Friedman rule is closely related to a seemingly unrelated issue that is the overinvestment versus underinvestment of R&D in the market economy, and this result is robust to alternative versions of the Schumpeterian model. JEL classi…cation: O30, O40, E41

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Section: Introductionsupporting

confidence: 80%

Section: Introductionmentioning

confidence: 77%

Section: Introductionmentioning

confidence: 99%

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R&D AND ECONOMIC GROWTH IN A CASH‐IN‐ADVANCE ECONOMY

Chu

Cozzi

2014

Int Economic Review

173

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“…As R&D activities are generally long-term and high-risk, returns on their investment are unpredictable, and sometimes, their results are intangible capital without collateral function [19,20] and require business secrets and core technologies to remain undisclosed [21]. They may also quickly become obsolete, devaluing their potential returns [22].…”

Section: Corporate Financial Capability Impacting Randd Investmentmentioning

confidence: 99%

“…They may also quickly become obsolete, devaluing their potential returns [22]. As such, firms have difficulty funding R&D activities by using external financing channels [16,20,23]; even if firms' R&D activities receive external, indirect support through financing or loans, this depends on their financial health. Thus, a firm's innovation is significantly correlated with its cash holding ratio, sales volume, and profitability [17].…”

Section: Corporate Financial Capability Impacting Randd Investmentmentioning

confidence: 99%

Corporate Governance Structure, Financial Capability, and the R&D Intensity in Chinese Sports Sector: Evidence from Listed Sports Companies

2019

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Innovations are the foundation of an enterprise's sustainable development, which is particularly important for sports firms in an evolving Chinese sport industrial environment. Analyzing publicly-listed sports firms on The New Third Board (NTB) in China, this study examined the influence of corporate financial capability and corporate governance structure on firms' R&D intensity through a series of multiple regression models. Findings revealed that corporate financial capability is an important determinant of R&D intensity, and corporate governance structure has a small but meaningful effect on R&D intensity. Specifically, for Chinese sports firms, several financial capability indicators, such as return on equity, accounts receivable turnover, assets turnover, and profit growth rate, have positive relationships with R&D intensity; however, other financial capability indicators, such as leverage and cash flow, have negative relationships with R&D intensity. Limited evidence was found to support the notion that corporate governance significantly influences R&D intensity, although sports firms with good governance mechanisms are more likely to increase the positive effects of financial capabilities on R&D intensity while decreasing the negative effects. Discussions were centered on planning and executing R&D activities in sports companies.

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Economics of natural disasters and technological innovations in Africa: an empirical evidence

Okolo

Wen

2022

Environ Sci Pollut Res

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This study provides an empirical analysis of the impact of the disaster on technological innovation by employing the instrumental variable (2SLS) method and instrumental variable fixed-effect method in a panel of 45 African economies from 1990 to 2019. The empirical results confirm disaster’s negative and significant impact on innovation. A 1% increase in a disaster will lead to about − 13.750% decrease in scientific journals, − 3.302% decrease in R&D, and − 3.644% decrease in the TFP, respectively. These findings are supported by panel quantile regression. The study identifies four possible channels through which disaster lowers innovation in African economies: (i) reducing trade, (ii) total investment opportunities, and (iii) human capital. Various robustness tests support our findings. Finally, the study bolsters historical capital models for the adoption of cutting-edge technology in the building, provides critical policy recommendations on environmental laws, and advocates for disaster-response policies; decentralization of the energy industry away from disaster-affected areas for greater private sector participation; financial incentives for start-ups to facilitate trade and investment; creating a culture of prevention, preparation, and resilience at all levels via knowledge and innovation; and reconstruction as a method of establishing disaster-resistant structures and habitat to offer a safer living environment.

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Liquidity, innovation and growth

Cited by 25 publications

References 59 publications

R&D AND ECONOMIC GROWTH IN A CASH‐IN‐ADVANCE ECONOMY

R&D AND ECONOMIC GROWTH IN A CASH‐IN‐ADVANCE ECONOMY

Corporate Governance Structure, Financial Capability, and the R&D Intensity in Chinese Sports Sector: Evidence from Listed Sports Companies

Economics of natural disasters and technological innovations in Africa: an empirical evidence

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