Determinants of investment in fixed assets and in intangible assets for high-tech firms

Abstract

Based on a sample of 141 Portuguese high-tech firms for the period 2004-2012 and using GMM system (1998) and LSDVC (2005) dynamic estimators, this paper studies whether the determinants of high-tech firms’ investment in fixed assets are identical to the determinants of their investment in intangible assets. The multiple empirical evidence obtained allows us to conclude that the determinants of their investment in fixed assets are considerably different from those of their investment in intangible assets. Debt is a determinant stimulating investment in fixed assets, with age being a determinant restricting such investment. Size, age, internal finance and GDP are determinants stimulating investment in intangible assets, whereas debt and interest rates restrict such investment. These results let us make important suggestions for the owners/managers of high-tech firms, and also for policy-makers.