Quarterly Journal of Business & Economics
This paper investigates the financing strategies of the R&D firm. Our hypotheses are based on Cho's (1992) game theory model where the firm develops a product but needs additional financing to bring it to market. The model generates a particularly rich set of hypotheses: 1) to fund the completion of its project and bring its product to market, the firm initiates negotiations with an established firm; 2) the majority of the acquisitions will be partial cash acquisitions through private secondary offerings. Confirming the model's hypotheses, we find that the majority of the acquisitions are partial cash acquisitions by significantly larger established R&D firms.
Original Publication Citation
Fogelberg, L., & Griffith, J. M. (2005). Financing strategies of the R&D firm. Quarterly Journal of Business & Economics, 44(1/2), 45-54.
Fogelberg, Lawrence and Griffith, John M,, "Financing Strategies of the R & D Firm" (2005). Finance Faculty Publications. 26.