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R&D financing of start-up firms : How much does founders' human capital matter?

Author

Listed:
  • Honjo, Yuji
  • 本庄, 裕司
  • ホンジョウ, ユウジ
  • Kato, Masatoshi
  • 加藤, 雅俊
  • カトウ, マサトシ
  • Okamuro, Hiroyuki
  • 岡室, 博之
  • オカムロ, ヒロユキ

Abstract

This paper explores research and development (R&D) financing of start-up firms. Using a sample from an original survey conducted in 2008, we identify whether initial funds and founder-specific characteristics relate to R&D investment of start-up firms in Japan. It is found that internal finance is positively associated with R&D investment. It is also found that founders with higher educational background, prior innovation output and academic affiliation tend to raise more funds for R&D. On the other hand, we provide evidence that the effects of founders' human capital are mediated by investment opportunities, which would indicate that R&D investment of start-up firms depends heavily on investment opportunities.

Suggested Citation

  • Honjo, Yuji & 本庄, 裕司 & ホンジョウ, ユウジ & Kato, Masatoshi & 加藤, 雅俊 & カトウ, マサトシ & Okamuro, Hiroyuki & 岡室, 博之 & オカムロ, ヒロユキ, 2010. "R&D financing of start-up firms : How much does founders' human capital matter?," CEI Working Paper Series 2009-15, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hitcei:2009-15
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/29234/wp2009-15.pdf
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    References listed on IDEAS

    as
    1. Leland, Hayne E & Pyle, David H, 1977. "Informational Asymmetries, Financial Structure, and Financial Intermediation," Journal of Finance, American Finance Association, vol. 32(2), pages 371-387, May.
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    Cited by:

    1. OKAMURO, Hiroyuki & 岡室, 博之 & KATO, Masatoshi, 2015. "Determinants of Quantitative and Qualitative Employment Growth: A Comparison between R&D-oriented and Other Start-ups in Japan," CCES Discussion Paper Series 62, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.

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    More about this item

    Keywords

    Founder; Human capital; Internal finance; R&D; Start-up;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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