How does leverage affect R&D intensity and how does R&D intensity impact on firm value in South Korea?

Byung Min, Russell Smyth

Research output: Contribution to journalArticleResearchpeer-review

11 Citations (Scopus)


We examine how leverage affects corporate research and development (R&D) intensity, as well as examine the impact of R&D on firm value in South Korea, a country in which corporate-funded R&D intensity is one of the highest in the world. Among our main results, we find that growth opportunities have a positive effect on R&D intensity, while leverage has a negative effect on R&D intensity. When leverage is at an extremely high level, the relationship between growth opportunities and R&D intensity turns from positive to negative. Using instrumental variables, we find that R&D generates an increase in firm value.
Original languageEnglish
Pages (from-to)5667-5675
Number of pages9
JournalApplied Economics
Issue number58
Publication statusPublished - 2016


  • Firm value
  • leverage
  • R&D
  • South Korea

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