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The determinants of innovation: What is the role of risk?

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  • Pierluigi Murro

    (University of Bari)

Abstract

Because of its importance in understanding and explaining growth, the topic of innovation has received a huge attention in the economic literature. However, our knowledge of the factors that inuence in- novation and its related activities is not as exhaustive as it could be. The present study aims at contributing to analyse the determinants of innovation, with a special focus on rm risk. Employing a rich sample of Italian manufacturing rms, we tested for the impact on innovation of the riskiness of the rm, as proxied by the probability of default. We found that riskiness of enterprise reduces the tendency to innovate for the rms. The main channel through which rm risk aects innovation capability appears to be that of innovation nancing.

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Paper provided by Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari in its series series with number 0032.

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Length: 896
Date of creation: Jul 2010
Date of revision: Jul 2010
Handle: RePEc:bai:series:wp0032

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Keywords: Technological Change; Financial Risk and Risk Management;

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Cited by:
  1. Clara Cardone-Riportella & Antonio Trujillo-Ponce & Anahí Briozzo, 2013. "Analyzing the role of mutual guarantee societies on bank capital requirements for small and medium-sized enterprises," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 16(2), pages 142-159, June.

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