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The Determinants Of Innovation: What Is The Role Of Risk?

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  • PIERLUIGI MURRO

Abstract

Because of its importance in understanding and explaining growth, the topic of innovation has received a huge attention in the economic literature. However, our knowledge of the factors that inuence in- novation and its related activities is not as exhaustive as it could be. The present study aims at contributing to analyse the determinants of innovation, with a special focus on rm risk. Employing a rich sample of Italian manufacturing rms, we tested for the impact on innovation of the riskiness of the rm, as proxied by the probability of default. We found that riskiness of enterprise reduces the tendency to innovate for the rms. The main channel through which rm risk aects innovation capability appears to be that of innovation nancing.
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Suggested Citation

  • Pierluigi Murro, 2013. "The Determinants Of Innovation: What Is The Role Of Risk?," Manchester School, University of Manchester, vol. 81(3), pages 293-323, June.
  • Handle: RePEc:bla:manchs:v:81:y:2013:i:3:p:293-323
    DOI: 10.1111/manc.2013.81.issue-3
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    References listed on IDEAS

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    Cited by:

    1. Clara Cardone-Riportella & Antonio Trujillo-Ponce & Anahí Briozzo, 2013. "Analyzing the role of mutual guarantee societies on bank capital requirements for small and medium-sized enterprises," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 16(2), pages 142-159, June.
    2. Jeremie Bertrand & Pierluigi Murro, 2018. "Is trade credit a substitute for relationship lending credit?," CERBE Working Papers wpC25, CERBE Center for Relationship Banking and Economics.
    3. Roberto Ganau & Eleonora Di Maria, 2014. "Determinants of technological innovation in SMEs. Firm-level factors, agglomeration economies and the role of KIBS providers," ERSA conference papers ersa14p820, European Regional Science Association.
    4. Juana Sanchez, 2014. "Innovation Output Choices And Characteristics Of Firms In The U.S," Working Papers 14-42, Center for Economic Studies, U.S. Census Bureau.
    5. J Doran & G Ryan, 2016. "The effectiveness of R&D and external interaction for innovation: Insights from quantile regression," Economic Issues Journal Articles, Economic Issues, vol. 21(1), pages 47-65, March.
    6. Ali Murad Syed & Zahid Riaz & Abdul Waheed, 2016. "Innovation, Firm Performance And Riskiness: Evidence From The Leading Worldwide Innovative Firms," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(07), pages 1-19, October.

    More about this item

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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