Basel II and the financing of R&D investments in Malaysia

Fathin Faizah Said, Emma M. Iglesias

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

We analyse how the financing of R & D investment in corporate entities in Malaysia has been affected by the implementation of Basel II. We show the results by disaggregating into three sub sectors: (1) firms with large investments in capital, (2) those not as intensive, (3) and all firms for which we have data on default rates. Our results show that both before and after Basel II, firms do not borrow from external resources in order to build R & D expenditure strategies, and we argue that firms obtain financial resources from external sources for assets purposes rather than for investment and sales strategies. Therefore Basel II was not able to change firm's financing patterns in relation to R & D, and this fact should be important for policy makers when planning future Basel accords. We also show that firms operating in industries which are characterized by a lower incidence of intangible assets are less exposed to financial constraints. Finally, for those firms for which we have data on default rates in 2008, we show that intangible assets in these companies are more exposed to financial constraints.

Original languageEnglish
Pages (from-to)127-152
Number of pages26
JournalInternational Journal of Economics and Management
Volume11
Issue number1
Publication statusPublished - 1 Jun 2017

Fingerprint

Basel II
Malaysia
Financing
Financial constraints
Default rate
Intangible assets
Politicians
Build-to-order
Financial resources
Expenditure
Sales strategies
Basel Accord
Planning
Resources
Investment strategy
Assets
Industry

Keywords

  • Basel II
  • Corporate sector
  • Financial constraint
  • Probit
  • R & D investment

ASJC Scopus subject areas

  • Business and International Management
  • Economics, Econometrics and Finance(all)
  • Strategy and Management

Cite this

Basel II and the financing of R&D investments in Malaysia. / Said, Fathin Faizah; Iglesias, Emma M.

In: International Journal of Economics and Management, Vol. 11, No. 1, 01.06.2017, p. 127-152.

Research output: Contribution to journalArticle

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