Financing Constraints and the Timing of Innovations in the German Services Sector
AbstractUsing newly available data at the firm level, this study provides convincing evidence of the importance of financial constraints in explaining the timing of innovations in the German services sector. Based on a dynamic model of firms' optimal R&D behavior under financial constraints, we estimate various versions of an econometric specification of the model with dichotomous innovation data by using a univariate ordered probit model and a newly developed modification of it. The modified econometric estimation strategies takes into account that some of the regressors are measured on an ordinal scale. Our results are consistent with the theoretical view that, because of capital markets imperfections, internal finance should be an important determinant of innovative activities by private firms in the manufacturing sector as well as in the services sector.
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Date of creation: 01 Aug 2000
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- Martin Kukuk & Manfred Stadler, 2001. "Financing Constraints and the Timing of Innovations in the German Services Sector," Empirica, Springer, vol. 28(3), pages 277-292, September.
- Kukuk, Martin & Stadler, Manfred, 1999. "Financing constraints and the timing of innovations in the German services sector," TÃ¼binger DiskussionsbeitrÃ¤ge 159, University of Tübingen, School of Business and Economics.
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
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