Bond Cross-Default Arrangement and Corporate R&D Intensity
Protecting the interests of bond investors is the fundamental guarantee for maintaining the operation and better leveraging the direct finan-cing function of the bond market.Using the listed companies that issued bonds from 2016 to 2021 as the research sample,we examine the impact of cross-default arrangement in 2016 on the corporate research and development(R&D)intensity.We find that companies with cross-default arrangement signifi-cantly reduce their R&D expenditure intensity because cross-default arrangement will increase the cost of debt financing,shorten the maturity of debt,while simultaneously reduce the level of risk-taking.When firms face greater debt repayment pressure and managers are more capable,the restrictive effect of cross-default arrangement on R&D intensity will be more significant;however,this impact will be mitigated by management's overconfidence and myo-pia as well as the availability of corporate funds.Besides,corporate R&D intensity will decrease when the arrangement is more easily triggered;the cross-default arrangement primarily reduces the expensed portion of R&D expenditure and forces the issuer to adjust the allocation of R&D investment prudently,which is reflected in maintaining the process of existing projects and reducing the initiation of new projects.Finally,cross-default arrangement can im-prove the efficiency of corporate R&D.This research has important enlightenment for enhancing the bond investor protection arrangement as well as bond credit risk safeguards.
万方数据
维普
