Panel study reveals internal cash flow heavily dictates research and development spending in small high-tech firms, indicating credit frictions constrain innovation.
Charles P. Himmelberg, Bruce C. Petersen, R & D and Internal Finance: A Panel Study of Small Firms in High-Tech Industries, The Review of Economics and Statistics, Vol. 76, No. 1 (Feb., 1994), pp. 38-51
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Himmelberg et al. (1994) studied this question.
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