How R&D intensive firms react to the COVID-19 pandemic: Evidence from a quasi-natural experiment
Abstrak
Prior research suggests that R&D intensive firms are especially vulnerable during crises due to their narrow specialization, high adjustment costs, increased distress risks, and higher sensitivity to financial distress. This paper exploits the difference in the research and development intensity as a quasi-natural experiment to examine the impact of the coronavirus pandemic on firm performance. Our study finds that the adverse consequences of COVID-19 on firms' profitability have been less pronounced for R&D intensive firms. R&D intensive firms are also able to record more positive changes in cash holdings as a response to the COVID-19 pandemic. As a result, R&D intensive firms are less likely to rely on external financing and record a lower level of increase in financing. Our results further highlight the potential function of R&D investment as a panacea for firm's growth during economic downturns.
Topik & Kata Kunci
Penulis (5)
Trang Hanh Lam Pham
Dung Hoai Thi Nguyen
Vu Tuan Chu
Kien Duc Nguyen
Bich-Ngoc Thi Pham
Akses Cepat
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Cek di sumber asli →- Tahun Terbit
- 2023
- Sumber Database
- DOAJ
- DOI
- 10.1016/j.heliyon.2023.e19329
- Akses
- Open Access ✓