Le coût du capital des entreprises à base de connaissance au Canada

The aim of this study is to measure the cost of capital of the Canadian knowledge based firms in order to compare it with other Canadian firms' cost of capital. To determine which firms are based on knowledge, we use the research and development ratio. Estimations are achieved with several models: historical return model, capital asset pricing model, and Fama-French (1993) three factor asset pricing model. We find that knowledge based firms have a cheaper cost of capital than others firms. This result raises heavy economical issues and may be linked with a research and development overinvestment problem. Encouraged by tax credits, firms could be induced to overstep their optimal research and development levels.
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