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Download or read book Asset Liquidity and Firm Innovation written by Ly Pham and published by . This book was released on 2017 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the effects of asset liquidity on innovation investments. We show that firms with high liquid assets tend to invest more in research and development (R&D) and generate a higher number of patents and patent citations, even after controlling for cash holdings, stock liquidity and other firm's characteristics. We further document that the effect is more pronounced for firms with high cash flow uncertainty or less capacity to access external equity capital. Overall, our findings show that asset liquidity is an important determinant of firm innovation.