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Financial Constraints and other Obstacles: Are they a Threat to Innovation Activity?

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Author Info
Sybrand Schim van der Loeff ()
Pierre Mohnen ()
Franz Palm ()
A. Tiwari

Additional information is available for the following registered author(s):

Abstract

In this paper we examine the importance of financial and other obstacles to innovation in the Netherlands using statistical information from the CIS 3.5 innovation survey. We report results on the effect of these obstacles on the firms’ decision to abandon, prematurely stop, seriously slow down, or not to start an innovative project. These results are compared with those from other studies in the Netherlands and other countries. We end with a discussion of policy measures that have been taken to overcome, or at least attenuate these obstacles, such as R&D tax incentives, venture capital financing and policy mix packages.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 2204.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2204

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Related research
Keywords: financial constraints; innovations; innovation policy;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  2. Gompers, Paul & Kovner, Anna & Lerner, Josh & Scharfstein, David, 2008. "Venture capital investment cycles: The impact of public markets," Journal of Financial Economics, Elsevier, vol. 87(1), pages 1-23, January. [Downloadable!] (restricted)
    Other versions:
  3. Frédérique Savignac, 2006. "The impact of financial constraints on innovation : evidence from French manufacturing firms," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00115717_v1, HAL. [Downloadable!]
    Other versions:
  4. Raghuram G. Rajan & Luigi Zingales, 2001. "Financial Systems, Industrial Structure, and Growth," Oxford Review of Economic Policy, Oxford University Press, vol. 17(4), pages 467-482.
  5. Vassilis Hajivassiliou & Frédérique Savignac, 2007. "Financing Constraints and a Firm’s Decision and Ability to Innovate: Establishing Direct and Reverse Effects," FMG Discussion Papers dp594, Financial Markets Group. [Downloadable!] (restricted)
  6. Steven Kaplan & Antoinette Schoar, 2003. "Private Equity Performance: Returns, Persistence and Capital," NBER Working Papers 9807, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. João F. Gomes & Amir Yaron & Lu Zhang, 2006. "Asset Pricing Implications of Firms' Financing Constraints," Review of Financial Studies, Oxford University Press for Society for Financial Studies, vol. 19(4), pages 1321-1356. [Downloadable!] (restricted)
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  9. Black, Bernard S. & Gilson, Ronald J., 1998. "Venture capital and the structure of capital markets: banks versus stock markets," Journal of Financial Economics, Elsevier, vol. 47(3), pages 243-277, March. [Downloadable!] (restricted)
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  11. Philippe Aghion & Thibault Fally & Stefano Scarpetta, 2007. "Credit Constraints as a Barrier to the Entry and Post-Entry Growth of Firms," IZA Discussion Papers 3237, Institute for the Study of Labor (IZA). [Downloadable!]
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  12. Myers, Stewart C. & Majluf, Nicolás S., 1945-, 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Working papers 1523-84., Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
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  14. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Kaplan, Steven & Strömberg, Per Johan, 2000. "Financial Contracting Theory Meets The Real World: An Empirical Analysis Of Venture Capital Contracts," CEPR Discussion Papers 2421, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  16. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June. [Downloadable!] (restricted)
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  20. Mohnen, Pierre & Roller, Lars-Hendrik, 2005. "Complementarities in innovation policy," European Economic Review, Elsevier, vol. 49(6), pages 1431-1450, August. [Downloadable!] (restricted)
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  21. Thomas Hellmann & Manju Puri, 2002. "Venture Capital and the Professionalization of Start-Up Firms: Empirical Evidence," Journal of Finance, American Finance Association, vol. 57(1), pages 169-197, 02. [Downloadable!] (restricted)
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  22. Cochrane, John H., 2005. "The risk and return of venture capital," Journal of Financial Economics, Elsevier, vol. 75(1), pages 3-52, January. [Downloadable!] (restricted)
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  23. Alexander Ljungqvist & Matthew Richardson, 2003. "The cash flow, return and risk characteristics of private equity," NBER Working Papers 9454, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  24. Gompers, Paul A, 1995. " Optimal Investment, Monitoring, and the Staging of Venture Capital," Journal of Finance, American Finance Association, vol. 50(5), pages 1461-89, December. [Downloadable!] (restricted)
  25. Mohnen, Pierre & Tiwari, Amaresh & Palm, Franz & Schim van der Loeff, Sybrand, 2007. "Financial Constraint and R&D Investment: Evidence from CIS," UNU-MERIT Working Paper Series 011, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
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  27. Svensson, Roger, 2004. "Commercialization of Patents and External Financing during the R&D-Phase," Working Paper Series 624, Research Institute of Industrial Economics. [Downloadable!]
  28. Brouwer, E., 2007. "Innovatie en Mededinging: Op Zoek naar de Bron van Welvaart en Vooruitgang," Discussion Paper 2007-021, Tilburg University, Tilburg Law and Economic Center. [Downloadable!]
  29. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: An Inverted-U Relationship," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 701-728, May.
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  30. Engel, Dirk & Keilbach, Max, 2007. "Firm-level implications of early stage venture capital investment -- An empirical investigation," Journal of Empirical Finance, Elsevier, vol. 14(2), pages 150-167, March. [Downloadable!] (restricted)
    Other versions:
  31. Svensson, Roger, 2007. "Commercialization of patents and external financing during the R&D phase," Research Policy, Elsevier, vol. 36(7), pages 1052-1069, September. [Downloadable!] (restricted)
  32. Galia, Fabrice & Legros, Diego, 2004. "Complementarities between obstacles to innovation: evidence from France," Research Policy, Elsevier, vol. 33(8), pages 1185-1199, October. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Kesidou, Effie & Szirmai, Adam, 2008. "Local Knowledge Spillovers, Innovation and Economic Performance in Developing Countries: A discussion of alternative specifications," UNU-MERIT Working Paper Series 033, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  2. Getachew, Yoseph, 2008. "Public Capital, Income Distribution and Growth," UNU-MERIT Working Paper Series 056, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  3. Azomahou, Théophile & Boucekkine, Raouf & Nguyen-Van, Phu, 2008. "Promoting clean technologies: The energy market structure crucially matters," UNU-MERIT Working Paper Series 032, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
    Other versions:
  4. Schoenmakers, Wilfred & Duysters, Geert & Vanhaverbeke, Wim, 2008. "Radical versus Non-Radical Inventions," UNU-MERIT Working Paper Series 036, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  5. Evens Salies, 2009. "A test of the Schumpeterian hypothesis in a panel Of European electric utilities," Documents de Travail de l'OFCE 2009-19, Observatoire Francais des Conjonctures Economiques (OFCE). [Downloadable!]
  6. Saebi, Tina & Dong, Qinqin, 2008. "Strategic motivations for Sino-Western alliances: a comparativeanalysis of Chinese and Western alliance formation drivers," UNU-MERIT Working Paper Series 030, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  7. Filipe Silva & Carlos Carreira, 2009. "No Deep Pockets: Some stylized results on firms' financial constraints," GEMF Working Papers 2009-06, GEMF - Faculdade de Economia, Universidade de Coimbra. [Downloadable!]
  8. Getachew, Yoseph, 2008. "Public Capital and Income Distribution: a Marriage of Hicks & Newman-Read," UNU-MERIT Working Paper Series 071, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  9. Lokshin, Boris & Mohnen, Pierre, 2008. "Wage effects of R&D tax incentives:Evidence from the Netherlands," UNU-MERIT Working Paper Series 034, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  10. Srholec, Martin, 2008. "A Multilevel Analysis of Innovation in Developing Countries," UNU-MERIT Working Paper Series 040, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
    Other versions:
  11. Bhuyan, Radhika & Mytelka, Lynn K., 2008. "Changing Configuration of Alternative Energy Systems," UNU-MERIT Working Paper Series 031, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  12. SadreGhazi, Shuan & Duysters, Geert, 2008. "Serving low-income markets: Rethinking Multinational Corporations’ Strategies," UNU-MERIT Working Paper Series 024, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
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