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The Financing Of R&D: Challenges For Romanian Firms

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  • Mihaela Diaconu

Abstract

This paper provides a review regarding the financing issues of innovative firms in Romania. The financing resources used by innovative firms are closely interdependent with innovation modes adopted by firms (R&D and non-R&D innovations). In the context I highlight the difficulties in attracting external funding resources and the implications for government policy. In this respect, I begin by describing some of the unique features of R&D investments. Then I discuss the various theoretical arguments why external finance for R&D might be more expensive than internal finance, going on to review statistical evidence on the support of this hypothesis and the solutions that have to be developed and adopted by the government. The paper concludes with a discussion of policy options.

Suggested Citation

  • Mihaela Diaconu, 2013. "The Financing Of R&D: Challenges For Romanian Firms," Studies and Scientific Researches. Economics Edition, "Vasile Alecsandri" University of Bacau, Faculty of Economic Sciences, issue 18.
    • Handle: RePEc:bac:fsecub:13-18-19
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    References listed on IDEAS

    as
    1. Bronwyn H. Hall, 2010. "The Financing of Innovative Firms," Review of Economics and Institutions, Università di Perugia, vol. 1(1).
    2. 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.
    3. Jeng, Leslie A. & Wells, Philippe C., 2000. "The determinants of venture capital funding: evidence across countries," Journal of Corporate Finance, Elsevier, vol. 6(3), pages 241-289, September.
    4. Hall, Bronwyn H. & Lerner, Josh, 2010. "The Financing of R&D and Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 609-639, Elsevier.
    5. James M. Poterba, 1989. "Venture Capital and Capital Gains Taxation," NBER Chapters, in: Tax Policy and the Economy, Volume 3, pages 47-68, National Bureau of Economic Research, Inc.
    6. Romain, Astrid & Pottelsberghe de la Potterie, Bruno van, 2003. "The Determinants of Venture Capital: A Panel Data Analysis of 16 OECD Countries," IIR Working Paper 03-25, Institute of Innovation Research, Hitotsubashi University.
    7. Dwight M. Jaffee & Thomas Russell, 1976. "Imperfect Information, Uncertainty, and Credit Rationing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(4), pages 651-666.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    innovation; firm; business angels; venture capital; debt financing;
    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
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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