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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...
Autores principales: | , , , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Elsevier
2023
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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. |
format | Online Article Text |
id | pubmed-10474416 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2023 |
publisher | Elsevier |
record_format | MEDLINE/PubMed |
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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