Financialization and the Slowdown in Korean Firms' R&D Investment-Reference-Cited by-同舟云学术

Financialization and the Slowdown in Korean Firms' R&D Investment

Published:2012-10 Issue:3 Volume:11 Page:35-49
ISSN:1535-3516
Container-title:Asian Economic Papers
language:en
Short-container-title:Asian Economic Papers

Author:

Seo Hwan Joo¹,Kim Han Sung²,Kim Yoo Chan³

Affiliation:

1. Division of Business Administration, Hanyang University, 171 Sa 3-dong Sangrok-gu, Ansan 426-791, Republic of Korea.

2. Ajou University, College of Social Science, San 5, Wongcheon-dong, Yeongtong-gu, Suwon, Korea 443-749.

3. (Corresponding Author) Division of Business Administration, Hanyang University, 171 Sa 3-dong Sangrok-gu, Ansan 426-791, Republic of Korea.

Abstract

This study investigates the effects of financialization on research and development (R&D) investment by nonfinancial corporations (NFCs) in Korea from 1994 to 2009. The results indicate that increased dividend payments and stock buybacks impeded R&D investment by reducing internal funds and planning horizons. In addition, increased financial investment and profit opportunities crowded out R&D investment by influencing managers' incentives. Further, estimation results obtained by dividing the sample period into before and after the 1997–98 Asian financial crisis (AFC) indicate that the progress of financialization had a negative effect on R&D investment only after the AFC.

Publisher

MIT Press - Journals

Subject

Political Science and International Relations,Economics and Econometrics,Finance

Link

https://www.mitpressjournals.org/doi/pdf/10.1162/ASEP_a_00160

Reference11 articles.

1. Shareholder value and corporate governance: some tricky questions

2. Financial systems, corporate control and capital accumulation

3. Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations

4. Is a Finance-led growth regime a viable alternative to Fordism? A preliminary analysis

5. Shareholder value and Financialization: consultancy promises, management moves

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