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With the economic uncertainty and changes in the business environment, reverse mergers have become a tool used to achieve the status as a publically traded entity able to access the capital markets. This study looks specifically at reverse merger transactions during the period of 2003 to 2011. The firms are identified by PIPE financing proceeds, industry code and country of operations. Prior research has shown that PIPE financing is a source of funding used by firms which tend to be small, high-tech firms which face financing constraints and have high research and development expenditures. I find evidence that the full sample of reverse merger firms have significant investment in research and development activities similar to firms which utilize PIPE financing. I also find that US firms have a positive relation to research and development activities while firms with operations in China have a negative relation to research and development activities.