The nonlinear relationship between financial constraints and R&D investment: the mediating role of executive stock options

IF 1.9 Q2 ECONOMICS JOURNAL OF ECONOMIC STUDIES Pub Date : 2023-11-29 DOI:10.1108/jes-08-2023-0424
Sedki Zaiane, Halim Dabbou
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Abstract

Purpose

The current study aims to investigate the mediating role of executive stock options in the nonlinear relationship between financial constraints and research and development (R&D) investment through two measures of financial constraints.

Design/methodology/approach

This study is based on a sample of 90 French firms for the period extending from 2008 to 2020. The authors employ a panel threshold method to analyze whether the impact of financial constraints on R&D investment depends on the level of financial constraints or not.

Findings

Using SA index (Hadlock and Pierce, 2010) and FCP index (Schauer et al., 2019) as measures of financial constraints, the authors demonstrate that the relationship between financial constraints and R&D investment is nonlinear. Moreover, the authors find that executive stock options mediate partially the relationship between financial constraints and R&D investment. More specifically, the authors show that stock options could play two roles depending on the level of the financial constraints; inconsistent mediation for firms with low/medium level of financial constraints and partial mediation for highly constrained firms.

Originality/value

This paper is the first to the best of the authors' knowledge to investigate the nonlinear relationship between financial constraints and R&D investment as well as the mediating role of executive stock option using dynamic panel threshold models.

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财务约束与研发投资的非线性关系:高管股票期权的中介作用
目的本研究旨在通过财务约束的两个度量,考察高管股票期权在财务约束与研发投资非线性关系中的中介作用。设计/方法/方法本研究基于2008年至2020年期间90家法国公司的样本。本文采用面板阈值法分析了财务约束对r&d投资的影响是否依赖于财务约束的程度。使用SA指数(Hadlock and Pierce, 2010)和FCP指数(Schauer et al., 2019)作为财务约束的度量,作者证明了财务约束与研发投资之间的关系是非线性的。此外,作者还发现,高管股票期权在财务约束与研发投资之间起到了部分中介作用。更具体地说,作者表明股票期权可以发挥两种作用,这取决于财务约束的程度;低/中等财务约束企业的不一致调解和高度约束企业的部分调解。创新/价值本文首次利用动态面板阈值模型研究了财务约束与研发投资之间的非线性关系以及高管股票期权的中介作用。
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来源期刊
CiteScore
4.00
自引率
5.90%
发文量
59
期刊介绍: The Journal of Economic Studies publishes high quality research findings and commentary on international developments in economics. The journal maintains a sound balance between economic theory and application at both the micro and the macro levels. Articles on economic issues between individual nations, emerging and evolving trading blocs are particularly welcomed. Contributors are encouraged to spell out the practical implications of their work for economists in government and industry
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