Financial constraints on R&D projects and Minsky moments: Containing the credit cycle

Authors
Laborda , Juan; Salas , Vicente; Suárez Gálvez, Cristina IsabelUniversity of Alcalá Author
Identifiers
Permanent link (URI): http://hdl.handle.net/10017/60002
DOI: 10.1007/s00191-021-00721-y
ISSN: 0936-9937
Date
2021
Affiliation
Universidad de Alcalá. Departamento de Economía
Bibliographic citation
Journal of Evolutionary Economics, 2021, v. 31, p. 1089-1111
Keywords
R&D
Financial constraints
Business cycle
Credit cycle
Financial instability hypothesis
Document type
info:eu-repo/semantics/article
Version
info:eu-repo/semantics/publishedVersion
Rights
© The Author(s), under exclusive licence to Springer-Verlag GmbH, DE part of Springer Nature 2021
Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)
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info:eu-repo/semantics/openAccess
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Abstract
This paper tests Minsky?s financial instability hypothesis (FIH) for a panel of Spanish manufacturing firms. We find that the probability of a firm being financially constrained externally in terms of undertaking innovation projects moves inversely with the business and credit cycle, which is consistent with Minsky?s FIH. We provide evidence that the credit and business cycles strengthen each other. These results highlight the importance of implementing polices designed to contain the financial cycle.
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© The Author(s), under exclusive licence to Springer-Verlag GmbH, DE part of Springer Nature 2021
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