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Managing liquidity in research-intensive firms: signaling and cash flow effects of patents and alliance activities
The effective holding and management of liquid assets is critical to success in research-intensive industries. The primary output of invention is new knowledge. However, because of its sticky characteristics, knowledge may not easily diffuse to external shareholders, leading to knowledge asymmetries between managers/employees and external suppliers of capital. Many valuable R&D projects may thus fail to attract external financing, limiting a firm's ability to invest in R&D. In this study, the authors examine how the cash flow and signaling properties of a firm's patents and certain aspects of its alliance strategy can attenuate such problems. Specifically, they suggest that a firm's R&D investments positively predict the level of its liquid asset holdings. This is due to the fact that invention-induced knowledge asymmetries increase the firm's cost of accessing external liquid capital. However, holding cash entails opportunity costs. In this regard, the authors also find that patent production and certain alliance activities provide important signaling mechanisms, which reduce knowledge asymmetries between the firm and capital markets, and consequently lower the firm's need to hold liquid assets. Empirical tests were conducted using a sample of 108 US-based biotechnology firms..Printed journal
Ketersediaan
| Call Number | Location | Available |
|---|---|---|
| PSB lt.dasar - Pascasarjana | 1 |
| Penerbit | : Strategic Management Society |
|---|---|
| Edisi | - |
| Subjek | Capital markets Cash flow Patents Liquid assets Research & development R&D studies Biotechnology industry |
| ISBN/ISSN | 1432095 |
| Klasifikasi | - |
| Deskripsi Fisik | - |
| Info Detail Spesifik | - |
| Other Version/Related | Tidak tersedia versi lain |
| Lampiran Berkas | Tidak Ada Data |