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How R&D intensive firms react to the COVID-19 pandemic: Evidence from a quasi-natural experiment

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...

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Detalles Bibliográficos
Autores principales: Pham, Trang Hanh Lam, Nguyen, Dung Hoai Thi, Chu, Vu Tuan, Nguyen, Kien Duc, Pham, Bich-Ngoc Thi
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Elsevier 2023
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10474416/
https://www.ncbi.nlm.nih.gov/pubmed/37662736
http://dx.doi.org/10.1016/j.heliyon.2023.e19329
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author Pham, Trang Hanh Lam
Nguyen, Dung Hoai Thi
Chu, Vu Tuan
Nguyen, Kien Duc
Pham, Bich-Ngoc Thi
author_facet Pham, Trang Hanh Lam
Nguyen, Dung Hoai Thi
Chu, Vu Tuan
Nguyen, Kien Duc
Pham, Bich-Ngoc Thi
author_sort Pham, Trang Hanh Lam
collection PubMed
description 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.
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spelling pubmed-104744162023-09-03 How R&D intensive firms react to the COVID-19 pandemic: Evidence from a quasi-natural experiment Pham, Trang Hanh Lam Nguyen, Dung Hoai Thi Chu, Vu Tuan Nguyen, Kien Duc Pham, Bich-Ngoc Thi Heliyon Research Article 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. Elsevier 2023-08-20 /pmc/articles/PMC10474416/ /pubmed/37662736 http://dx.doi.org/10.1016/j.heliyon.2023.e19329 Text en © 2023 The Authors https://creativecommons.org/licenses/by-nc-nd/4.0/This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
spellingShingle Research Article
Pham, Trang Hanh Lam
Nguyen, Dung Hoai Thi
Chu, Vu Tuan
Nguyen, Kien Duc
Pham, Bich-Ngoc Thi
How R&D intensive firms react to the COVID-19 pandemic: Evidence from a quasi-natural experiment
title How R&D intensive firms react to the COVID-19 pandemic: Evidence from a quasi-natural experiment
title_full How R&D intensive firms react to the COVID-19 pandemic: Evidence from a quasi-natural experiment
title_fullStr How R&D intensive firms react to the COVID-19 pandemic: Evidence from a quasi-natural experiment
title_full_unstemmed How R&D intensive firms react to the COVID-19 pandemic: Evidence from a quasi-natural experiment
title_short How R&D intensive firms react to the COVID-19 pandemic: Evidence from a quasi-natural experiment
title_sort how r&d intensive firms react to the covid-19 pandemic: evidence from a quasi-natural experiment
topic Research Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10474416/
https://www.ncbi.nlm.nih.gov/pubmed/37662736
http://dx.doi.org/10.1016/j.heliyon.2023.e19329
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