TY  - RPRT
        AU  - Fryges, Helmut
AU  - Kohn, Karsten
AU  - Ullrich, Katrin
        TI  - The Interdependence of R&D Activity and Debt Financing of Young Firms
        PY  - 2011/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 6217
        UR  - https://www.iza.org/publications/dp6217
        AB  - We investigate the interdependence of debt financing and R&D activities of young firms. Using micro-level data of the KfW/ZEW Start-up Panel, our estimation results show that firm characteristics are more important than personal characteristics of the founders for explaining young firms' leverage, whereas firm characteristics and human capital of both founders and employees heavily influence R&D intensity. Applying a bivariate Tobit model, we find that there is a positive interdependent relationship between the share of loan financing and R&D intensity. A higher share of loan financing allows for more R&D in young firms and, at the same time, a higher R&D intensity allows for a higher loan share. This relationship cannot be detected by merely estimating single-equation models for R&D intensity and debt financing.
        KW  - KfW/ZEW Start-up Panel
KW  - business start-ups
KW  - capital structure
KW  - innovation financing
KW  - Germany
        ER  -