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Microeconometric evidence of financing frictions and innovative activity - a revision

Author

Listed:
  • Tiwari A.K.
  • Mohnen P.
  • Palm F.C.
  • Schim van der Loeff S.

    (UNU-MERIT)

Abstract

Using 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 RD 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 RD intensity are not uniform across firm characteristics. A new Control Function estimator to account for heterogeneity and endogeneity has been developed.

Suggested Citation

  • Tiwari A.K. & Mohnen P. & Palm F.C. & Schim van der Loeff S., 2013. "Microeconometric evidence of financing frictions and innovative activity - a revision," MERIT Working Papers 2013-027, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2013027
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    References listed on IDEAS

    as
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    4. Newey, Whitney K., 1984. "A method of moments interpretation of sequential estimators," Economics Letters, Elsevier, vol. 14(2-3), pages 201-206.
    5. Mathias Dewatripont & Lars Peter Hansen & Stephen Turnovsky, 2003. "Advances in Economics and Econometrics: Theory and Applications, Eighth World Congress," ULB Institutional Repository 2013/176003, ULB -- Universite Libre de Bruxelles.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Multiple or Simultaneous Equation Models; Corporate Finance and Governance; Technological Change; Research and Development; Intellectual Property Rights;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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