Debt Constraint, Asymmetric Cost Behavior and R&D Investment

We analyze the relation between debt constraint, asymmetric cost behavior and enterprise R&D(Research and Development) investment using 4172 Chinese listed companies in 2012－2016. The analyzed results show that debt constraint is negatively correlated with R&D investment, and cost stickiness is positively correlated with R&D investment. Cost stickiness has a significantly negative moderating effect between debt constraint and R&D investment. These result indicate that the debt constraint of a company can restrict the level of R&D investment, but the asymmetric cost behavior can improve the level of R&D investment. In another word, the asymmetric cost behavior can decrease the negative effect of debt constraint on R&D investment. We divided companies as state－owned companies and non－state－owned companies, and found that the relation between the cost stickiness and R&D investment is significant for non－state－owned companies, but not significant for state－owned companies. This paper reveals the positive economic consequences of cost stickiness and provides a new perspective for alleviating the impact of debt constraint on R&D investment.