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Do R&D subsidies affect SMEs’ access to external financing?

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  • Meuleman, Miguel
  • De Maeseneire, Wouter
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    Abstract

    Many countries spend sizeable sums of public money on R&D grants to alleviate debt and equity gaps for small firms’ innovation projects. In making such awards, knowledgeable government officials may certify firms to private financiers. Using a unique Belgian dataset of 1107 approved requests and a control group of denied requests for a specific type of R&D grant, we examine the impact of subsidies on small firms’ access to external equity, short term and long term debt financing. We find that obtaining an R&D subsidy provides a positive signal about SME quality and results in better access to long-term debt.

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    Bibliographic Info

    Article provided by Elsevier in its journal Research Policy.

    Volume (Year): 41 (2012)
    Issue (Month): 3 ()
    Pages: 580-591

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    Handle: RePEc:eee:respol:v:41:y:2012:i:3:p:580-591

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    Web page: http://www.elsevier.com/locate/respol

    Related research

    Keywords: R&D subsidies; Government policy; SMEs; Financial constraints; Certification hypothesis; Behavioural additionality;

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    Cited by:
    1. Filipe Silva & Carlos Carreira, 2012. "Financial Constraints: Do They Matter to R&D Subsidy Attribution?," GEMF Working Papers 2012-18, GEMF - Faculdade de Economia, Universidade de Coimbra.

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