| Summary: | 碩士 === 真理大學 === 經濟學系財經碩士班 === 107 === This study investigates the relationship between R&D investment and cash flows for Taiwanese manufacturing firms during 2000–2017. We use the operating cash flow and financing cash flow as the internal and external cash flows, respectively. The results obtained using a panel data model are summarized in the following text. First, the estimated coefficients for the internal cash flow are positive and significant at the 1% level for the entire sample after controlling for other potential influences. By contrast, the estimated coefficients for external cash flow are significantly negative. The results indicate that firms with higher operating cash flow are involved in more R&D activities, whereas firms with more financing cash flow engage in less R&D investment. Moreover, young firms with higher operating cash flow invest more in R&D. The empirical results obtained after dividing samples into small and large firms indicate that small firms with greater operating cash flow and less financing cash flow engage in more R&D investment. Finally, considering the various industrial environments, we further separate the samples into electronics and non-electronics firms. In both electronics and non-electronics industries, the results indicate that the R&D investment of firms increases as the internal cash flow increases. The results suggest that the internal cash flow critically influences R&D activities.
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