Effects of Leverage Ratio on Corporate Research and Development Expenditure of Small and Medium Enterprises
Effects of Leverage Ratio on Corporate Research and Development Expenditure of Small and Medium Enterprises

Summary/Abstract: With the data of listed companies on SME board in 2014-2017, fixed effect model is utilized for testing the effect of leverage ratio on corporate research and development expenditure of small and medium enterprises from the perspectives of debt maturity, debt source, and innovation heterogeneity. The empirical result reveals significantly negative effects of leverage level on corporate R&D expenditure of domestic SMEs, and such effects become more obvious in enterprises engaging in exploratory innovation. From the perspectives of debt maturity and source, extremely high short-term debt level and excessive dependence on commercial credit as corporate financing channels are the factors in high leverage level restraining corporate R&D expenditure of domestic SMEs.

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