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

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 consis...

Descripción completa

Detalles Bibliográficos
Autores: Laborda, Juan, Salas, Vicente, Suárez Gálvez, Cristina Isabel|||0000-0003-2579-0734
Tipo de recurso: artículo
Fecha de publicación:2021
País:España
Institución:Universidad de Alcalá (UAH)
Repositorio:e_Buah Biblioteca Digital Universidad de Alcalá
Idioma:inglés
OAI Identifier:oai:ebuah.uah.es:10017/60002
Acceso en línea:http://hdl.handle.net/10017/60002
https://dx.doi.org/10.1007/s00191-021-00721-y
Access Level:acceso abierto
Palabra clave:R&D
Financial constraints
Business cycle
Credit cycle
Financial instability hypothesis
E12
E32
G01
Economía
Economics
Descripción
Sumario: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.