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Article: Soft Budget Constraint and the Optimal Choices of Research and Development Projects Financing

TitleSoft Budget Constraint and the Optimal Choices of Research and Development Projects Financing
Authors
KeywordsCentralized vs decentralized economies
Internal vs external finance
R&D project finance
Soft budget constraint
Issue Date1998
PublisherAcademic Press. The Journal's web site is located at http://www.elsevier.com/locate/jce
Citation
Journal Of Comparative Economics, 1998, v. 26 n. 1, p. 62-79 How to Cite?
AbstractThrough analyzing the softness and hardness of budgeting constraints in research and development (R&D) investment under different institutions, we develop a theory of optimal R&D financing. Our theory not only provides a clear comparison of investment efficiency between centralized economies and market economies but also extends the analysis of soft budget constraint to firms in market economy. Based on this theory, we characterize optimal choices of R&D project financing in centralized and decentralized economies. Our results explain why some projects are financed internally by a large firm but others are cofinanced externally by several firms. We also explain what makes a centralized economy inefficient in R&D.J. Comp. Econom.,March 1998, 26(1), pp. 62-79. Queen Mary and Westfield College, University of London, Mile End Road, London E1 4NS, United Kingdom, and Financial Markets Group, London School of Economics, Houghton Street, London WC2A 2AE, United Kingdom; and London School of Economics, Houghton Street, London WC2A 2AE, United Kingdom. © 1998 Academic Press.
Persistent Identifierhttp://hdl.handle.net/10722/153488
ISSN
2015 Impact Factor: 1.38
2015 SCImago Journal Rankings: 1.066
SSRN
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorHuang, Hen_HK
dc.contributor.authorXu, Cen_HK
dc.date.accessioned2012-08-07T03:00:21Z-
dc.date.available2012-08-07T03:00:21Z-
dc.date.issued1998en_HK
dc.identifier.citationJournal Of Comparative Economics, 1998, v. 26 n. 1, p. 62-79en_HK
dc.identifier.issn0147-5967en_HK
dc.identifier.urihttp://hdl.handle.net/10722/153488-
dc.description.abstractThrough analyzing the softness and hardness of budgeting constraints in research and development (R&D) investment under different institutions, we develop a theory of optimal R&D financing. Our theory not only provides a clear comparison of investment efficiency between centralized economies and market economies but also extends the analysis of soft budget constraint to firms in market economy. Based on this theory, we characterize optimal choices of R&D project financing in centralized and decentralized economies. Our results explain why some projects are financed internally by a large firm but others are cofinanced externally by several firms. We also explain what makes a centralized economy inefficient in R&D.J. Comp. Econom.,March 1998, 26(1), pp. 62-79. Queen Mary and Westfield College, University of London, Mile End Road, London E1 4NS, United Kingdom, and Financial Markets Group, London School of Economics, Houghton Street, London WC2A 2AE, United Kingdom; and London School of Economics, Houghton Street, London WC2A 2AE, United Kingdom. © 1998 Academic Press.en_HK
dc.languageeng-
dc.publisherAcademic Press. The Journal's web site is located at http://www.elsevier.com/locate/jceen_HK
dc.relation.ispartofJournal of Comparative Economicsen_HK
dc.rightsNOTICE: this is the author’s version of a work that was accepted for publication in Journal of Comparative Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in PUBLICATION, [VOL 26, ISSUE 1, 1998] DOI 10.1006/jcec.1997.1508-
dc.subjectCentralized vs decentralized economiesen_HK
dc.subjectInternal vs external financeen_HK
dc.subjectR&D project financeen_HK
dc.subjectSoft budget constrainten_HK
dc.titleSoft Budget Constraint and the Optimal Choices of Research and Development Projects Financingen_HK
dc.typeArticleen_HK
dc.identifier.emailXu, C: cgxu@hku.hken_HK
dc.identifier.authorityXu, C=rp01118en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1006/jcec.1997.1508en_HK
dc.identifier.scopuseid_2-s2.0-0003240673en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0003240673&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume26en_HK
dc.identifier.issue1en_HK
dc.identifier.spage62en_HK
dc.identifier.epage79en_HK
dc.identifier.isiWOS:000073587900006-
dc.publisher.placeUnited Statesen_HK
dc.identifier.ssrn116011-
dc.identifier.scopusauthoridHuang, H=7405612120en_HK
dc.identifier.scopusauthoridXu, C=23020300700en_HK

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