Do R&D subsidies affect SME's: access to external financing
Many countries spend sizeable sums of public money on R&D grants to alleviate debt and equity gaps for small firms’ innovation projects. In making such awards, knowledgeable government officials may certify firms to private financiers. This paper investigates whether government subsidies to R&D enhance SMEs’ access to external financing due to this certification effect. Using a unique Belgian dataset of 1107 approved requests and a control group of 501 denied requests for a specific type of R&D grant, we examine the impact on small firms’ external equity, short term and long term debt financing. We find that obtaining a R&D subsidy provides a positive signal about SME quality and results in better access to long-term debt.
|Date of creation:||10 Sep 2008|
|Date of revision:|
|Contact details of provider:|| Postal: Reep 1, 9000 Gent|
Phone: +32 9 210 98 99
Fax: +32 9 210 97 00
Web page: http://www.vlerick.com
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:vlg:vlgwps:2008-12. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Isabelle Vandenbroere)
If references are entirely missing, you can add them using this form.