Debt, Innovation, and Growth

Thomas Geelen, Jakub Hajda, Erwan Morellec

Publikation: KonferencebidragPaperForskningpeer review

Abstrakt

Recent empirical studies show that innovative firms heavily rely on debt financing. This paper investigates the relation between debt financing, innovation, and growth in a Schumpeterian growth model in which firms’ dynamic R&D and financing choices are jointly and endogenously determined. The paper demonstrates that while debt hampers innovation by incumbents due to debt overhang, it also stimulates entry, thereby fostering innovation and growth at the aggregate level. The paper also shows that debt financing has large effects on firm entry, firm turnover, and industry structure and evolution. Lastly, it predicts substantial intra-industry variation in leverage and innovation, in line with the empirical evidence.
OriginalsprogEngelsk
Publikationsdato2020
Antal sider58
StatusUdgivet - 2020
BegivenhedThe 80th Annual Meeting of American Finance Association. AFA 2020 - San Diego, USA
Varighed: 3 jan. 20205 jan. 2020
Konferencens nummer: 80
https://afajof.org/annual-meeting/

Konference

KonferenceThe 80th Annual Meeting of American Finance Association. AFA 2020
Nummer80
LandUSA
BySan Diego
Periode03/01/202005/01/2020
Internetadresse

Citationsformater

Geelen, T., Hajda, J., & Morellec, E. (2020). Debt, Innovation, and Growth. Afhandling præsenteret på The 80th Annual Meeting of American Finance Association. AFA 2020, San Diego, USA.