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Subsidies, financial constraints and firm innovative activities in emerging economies

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  • Simona Mateut

    (University of Nottingham)

Abstract

This paper investigates the relationship between public subsidies and firm innovation in transition and developing economies, which are likely to have less developed financial markets. Innovation includes the introduction of new products or services and the upgrade of existing ones, which is of particular relevance for these economies. The results obtained using alternative measures of financial constraints and market competition, within a range of econometric techniques, suggesting a positive relation between public subsidies and the innovative activities of 11,998 firms across 30 Eastern Europe and Central Asian countries. This correlation is stronger for firms more likely to be financially constrained.

Suggested Citation

  • Simona Mateut, 2018. "Subsidies, financial constraints and firm innovative activities in emerging economies," Small Business Economics, Springer, vol. 50(1), pages 131-162, January.
    • Handle: RePEc:kap:sbusec:v:50:y:2018:i:1:d:10.1007_s11187-017-9877-3
    DOI: 10.1007/s11187-017-9877-3
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    More about this item

    Keywords

    Innovation; Subsidies; Financial constraints; Emerging countries;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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