Microeconometric evidence of financing frictions and innovative activity - a revision
AbstractUsing Dutch data we empirically investigate how financing and innovation vary across firm characteristics. We find that when firms face financial constraints, debt financing and innovation choices are not independent of firm characteristics, and R&D slows down. In the absence of financial constraints, however, as they raise debt, firms become less inclined to innovate and the change in the propensity to innovate no longer varies with firm characteristics. We find that financing constraints faced, propensity to innovate, and R&D intensity are not uniform across firm characteristics. A new 'Control Function' estimator to account for heterogeneity and endogeneity has been developed.
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Bibliographic InfoPaper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 027.
Date of creation: 2013
Date of revision:
Innovation; R&D; Capital Structure; Financial Constraints; Firm Characteristics; Correlated Random Effects; Control Function; Expected a Posteriori;
Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-29 (All new papers)
- NEP-CFN-2013-11-29 (Corporate Finance)
- NEP-INO-2013-11-29 (Innovation)
- NEP-KNM-2013-11-29 (Knowledge Management & Knowledge Economy)
- NEP-SBM-2013-11-29 (Small Business Management)
- NEP-TID-2013-11-29 (Technology & Industrial Dynamics)
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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