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Risk Aversion And Entrepreneurship: Financing Innovation For Smes Across Europe. Evidence From Multilevel Models

Author

Listed:
  • Francesco Aiello

    (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria)

  • Graziella Bonanno
  • Stefania Patrizia Sonia Rossi

    (Dipartimento di Scienze Economiche, Aziendali, Matematiche e Statistiche "Bruno de Finetti" - DEAMS, Università degli Studi di Trieste)

Abstract

This paper aims to evaluate the role played by different sources of finance when analysing firms’ attitudes to innovate. The empirical investigation is based on the firm-level data for a large sample of European SMEs across the 2012–2017 period. Different measures of finance and several robustness checks are used to select a well-behaved probit multilevel model. Importantly, results show that the probability to innovate increases when firms use internal finance and grants. The same applies when funds come from family and friend channels, while no conclusive evidence is found for bank loans.

Suggested Citation

  • Francesco Aiello & Graziella Bonanno & Stefania Patrizia Sonia Rossi, 2019. "Risk Aversion And Entrepreneurship: Financing Innovation For Smes Across Europe. Evidence From Multilevel Models," Working Papers 201902, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    • Handle: RePEc:clb:wpaper:201902
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    More about this item

    Keywords

    Product innovation; Financing sources; Multilevel model; Firm heterogeneity; Country effect;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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