Financing of innovations – thresholds and options
AbstractThe paper investigates thresholds and options for financing innovation activities in manufacturing and services using data from the German Community Innovation Survey (CIS) 2007. We analyze the significance of financing restrictions, especially the role of internal financing, external capital, and public funding, and discuss applicable management options to cope with challenges in markets and technology. We find that most firms rely mainly on selffinancing means to start an innovation project. As a consequence of information asymmetries, private investors, e.g. banks, are uneager to invest in risky innovative ventures. Public funding might complement internal financing in order to balance shortcomings in private capital provision, but these sources have to be identified and convinced. In sum, the empirical work states that financing innovation is an entrepreneurial task, and the management of innovation needs strategic thinking as well as a well defined capital portfolio policy.
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Bibliographic InfoArticle provided by Economic Publishing House in its journal Management & Marketing.
Volume (Year): 4 (2009)
Issue (Month): 2 (Summer)
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Financial management; innovation and entrepreneurship; business policies and strategies.;
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- Movahedi, Mohammad & Gaussens, Olivier, 2011. "Innovation, productivity, and export: Evidence from SMEs in Lower Normandy, France," MPRA Paper 40443, University Library of Munich, Germany, revised 07 Jun 2012.
- Mohammad Movahedi & Olivier Gaussens, 2013. "Les effets de l’exportation sur l’innovation et la productivité : Analyse empirique sur un échantillon de PMI," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201307, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
- Stefan Kipar, 2011. "The Effect of Restrictive Bank Lending on Innovation: Evidence from a Financial Crisis," Ifo Working Paper Series Ifo Working Paper No. 109, Ifo Institute for Economic Research at the University of Munich.
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