The Effects of Macroprudential Policies on Research and Development Expenditure - A System GMM Approach
(2022) NEKN01 20221Department of Economics
- Abstract
- Preliminary firm level evidence suggests that macroprudential policies reduce firm credit growth and MSME investment, and could therefore have a negative impact on economic growth. However, the question remains if macroprudential policies affect R\&D investments as well. Although R&D is primarily financed internally, the literature also suggests that debt financing may be used to some degree depending on firm and country characteristics. Furthermore, implementation of macroprudential policies may also affect R&D indirectly by reducing access to external finance for other investments, compelling firms to deprioritize R&D in their use of internal funds. This study is a first attempt to investigate the effects of borrower-targeted... (More)
- Preliminary firm level evidence suggests that macroprudential policies reduce firm credit growth and MSME investment, and could therefore have a negative impact on economic growth. However, the question remains if macroprudential policies affect R\&D investments as well. Although R&D is primarily financed internally, the literature also suggests that debt financing may be used to some degree depending on firm and country characteristics. Furthermore, implementation of macroprudential policies may also affect R&D indirectly by reducing access to external finance for other investments, compelling firms to deprioritize R&D in their use of internal funds. This study is a first attempt to investigate the effects of borrower-targeted macroprudential policies on research and development expenditures. We estimate a dynamic panel model of R&D financing using a system GMM approach on a heterogeneous sample of European firm level data. Our results indicate that implementation and tightening of borrower-targeted macroprudential policies is associated with lower R&D expenditures for MSMEs and unlisted firms. No evidence is found that these policies affect large and listed firms. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9084875
- author
- Lancelot, Nina Maria LU and Nilsson, Charlie LU
- supervisor
- organization
- course
- NEKN01 20221
- year
- 2022
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- macroprudential policy, research and development, economic growth, financial constraints
- language
- English
- id
- 9084875
- date added to LUP
- 2022-10-10 09:22:39
- date last changed
- 2022-10-10 09:22:39
@misc{9084875,
abstract = {{Preliminary firm level evidence suggests that macroprudential policies reduce firm credit growth and MSME investment, and could therefore have a negative impact on economic growth. However, the question remains if macroprudential policies affect R\&D investments as well. Although R&D is primarily financed internally, the literature also suggests that debt financing may be used to some degree depending on firm and country characteristics. Furthermore, implementation of macroprudential policies may also affect R&D indirectly by reducing access to external finance for other investments, compelling firms to deprioritize R&D in their use of internal funds. This study is a first attempt to investigate the effects of borrower-targeted macroprudential policies on research and development expenditures. We estimate a dynamic panel model of R&D financing using a system GMM approach on a heterogeneous sample of European firm level data. Our results indicate that implementation and tightening of borrower-targeted macroprudential policies is associated with lower R&D expenditures for MSMEs and unlisted firms. No evidence is found that these policies affect large and listed firms.}},
author = {{Lancelot, Nina Maria and Nilsson, Charlie}},
language = {{eng}},
note = {{Student Paper}},
title = {{The Effects of Macroprudential Policies on Research and Development Expenditure - A System GMM Approach}},
year = {{2022}},
}