Investment in intangible capital--in particular, research and development--increased dramatically since the 1990s. However, productivity growth remains sluggish in recent years. One potential reason is that a significant share of the increase in intangible investment is geared toward consumer...

We develop a theory of optimal financing for R&D-intensive firms that uses their unique features—large capital outlays, long gestation periods, high upside, and low probabilities of R&D success—that explains three prominent stylized facts about these firms: their relatively low use of debt,...

We develop a theory of optimal financing for R&D-intensive firms that uses their unique features--large capital outlays, long gestation periods, high upside, and low probabilities of R&D success--that explains three prominent stylized facts about these firms: their relatively low use of debt,...