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Universal Banking and Investment in R&D Intensive Companies an Empirical Analysis STE-WP-15 , 2002

Researchers
Aharon Shaket
Cite As:
Shaket Aharon . Universal Banking and Investment in R&D Intensive Companies an Empirical Analysis STE-WP-15 , 2002 Haifa Israel: Samuel Neaman Institute, 2002. https://www.neaman.org.il/EN/Universal-Banking-Investment-RD-Intensive-Companies-STE-WP-15
Download files:
STE15.pdf(664KB)

This study provides a new insight to why Israeli R&D intensive companies float their equity on foreign markets. A variety of studies have tackled this issue but very few discuss the relationship between strong universal banks who dominate various areas of the financial sector and availability of funds for commercially driven technology research.

 

The study shows that a 10% increase in R&D expenses (as a percent of the company’s net book value) reduces the probability of a bank choosing to purchase shares of the company by 25%. No such correlation was established in private brokers. In a market where banks have a pinnacle role in allocation of resources R&D intensive companies have no choice but to float their stock in markets more receptive to their business.

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