Coldbeck, Beata and Ozkan, Aydin (2018) Comparison of adjustment speeds in target research and development and capital investment: What did the financial crisis of 2007 change? Journal of Business Research, 84. pp. 1-10. ISSN 0148-2963

This paper investigates the dynamics of R&D and capital investment using a large sample of US firms during the
period 2002–2016. A partial adjustment approach is employed with a specific focus on the impact of the financial
crisis on target adjustment speed. Evidence suggests that firms have a target in both types of investment
and adjust to it at varying speeds. Specifically, firms adjusted to the capital investment target faster than to R&D
investment. However, firms increased the adjustment speed in R&D investment significantly during the crisis,
and it has remained at similar levels during the post-crisis period. The changes in adjustment speeds can be
explained by several firm-specific characteristics that are related to the ability of firms to raise internal finance.

Paper Oct 2017.pdf - Accepted Version
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