Research and/or Development? Financial Frictions and Innovation Investment

We thank Frank Limehouse, Lanwei Yang and Shahin Davoudpour for their help and advices working with the Census data. We thank Davin Wang and Anoushka Nalwa for the excellent research assistance. We also thank the seminar participants at Rice University, Erasmus Rotterdam, Hong Kong University, Simon Business School (University of Rochester), Kellogg School of Management and Yeshiva University, FGV (Sao Paolo), and the conference participants at NBER Productivity (2023), CICF (2023), FIRS (2023), MFA (2023), Booth Empirical Finance Conference (2023), HEC Paris (2022) for the useful comments. In particular, we want to thank for their feedbacks Ramin Baghai (discussant), Bo Bian (discussant), Sharon Belenzon (discussant), Max Maksimovic (discussant), Jamie Brown, Yael Hochberg, Johan Hombert, Sabrina Howell, Kilian Huber, David Matsa, Christian Opp, Dimitris Papanikolaou, K. Ramesh, Kunal Sachdeva, Paola Sapienza, Tarik Umar, Jonathan Wallen, Pavel Zryumov. Any views expressed are those of the authors and not those of the U.S. Census Bureau. The Census Bureau’s Disclosure Review Board and Disclosure Avoidance Officers have reviewed this information product for unauthorized disclosure of confidential information and have approved the disclosure avoidance practices applied to this release. This research was performed at a Federal Statistical Research Data Center under FSRDC Project Number 1874. (CBDRB-FY22-P1874-R9607, CBDRB-FY23-P1874-R10456). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.