The demand and supply of external finance for innovative firms

By Andrea Mina, Henry Lahr, A. Hughes. 2013

239 citations recorded by the source corpus.

Access to finance has figured prominently in the debate on barriers to firm growth, even though existing empirical research has not found conclusive evidence of a "finance gap." Moreover, it is not clear to what extent innovation aggravates financial constraints and what role innovation inputs, processes and outputs play in the market for external capital. In this article, we analyze how firm-level innovation affects (i) the likelihood of seeking external finance and (ii) the likelihood of obtaining it. We analyze an original data set of 3095 UK and US firms (small and medium size enterprises and middle-market) containing information on firms' innovation behaviors, performance, and finances for the period 2002--2004. Controlling for firm-specific characteristics, we provide novel and extensive evidence on the links between innovation, in its input, process and output dimensions, and the demand for external capital and its supply. Copyright 2013 The Author 2013. Published by Oxford University Press on behalf of Associazione ICC., Oxford University Press.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/f86651c6ed01829cae6a612c6de21f24e2143883

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Citations in the corpus

Innovation, SMEs and the liability of distance: the demand and supply of bank funding in UK peripheral regions (2016, methodology): “Following Mina et al. (2013) we investigate both the demand and supply of finance for innovative firms using a probit model and, where appropriate, a Heckman correction for selection effects.”
Financing patterns of European SMEs – an empirical taxonomy (2016, unknown): “…by the high failure risk of innovations, the informational opaqueness of the projects for external capital providers and the low diversification possibilities of SMEs (Fazzari, Hubbard, and Petersen 1988; Ang 1992; Carpenter and Petersen 2002a; Magri 2009; Hall 2010; Mina, lahr, and Hughes 2013).”
Assessing the Opportunities and Challenges of Green Finance in Italy: An Analysis of the Biomass Production Sector (2019, background): “[35], Stockdale [36], Silva and Carreira [37], Campello et al.”
Financial Constraints and the Failure of Innovation Projects (2018, unknown): “In essence, innovative firms encounter financial obstacles to investing in innovative activities through the presence of externalities, problems of informational asymmetries and problems of appropriability with the return on R &D investment (Mina et al., 2013).”
Financing innovation: creative destruction vs. destructive creation (2013, background): “Mina et al. (2013), ‘The Demand and Supply of External Finance for Innovative Firms’, complement previous studies where it is revealed that the problem in financing innovation comes more from the demand side than the supply side: there are not enough firms that want to grow (i.e. that the problem…”
Ownership structures and R&D in Europe: the good institutional investors, the bad and ugly impatient shareholders (2013, background): “project generally involves technical or scientific skills, and it can be all the more difficult for investors to evaluate projects when companies decline to fully reveal the information necessary to assess the real value of innovation (Mina et al., 2012).”
Access to finance for innovative SMEs since the financial crisis (2015, methodology): “A second study with a similar focus on access to finance is Mina et al. (2013), who study both UK and US firms in the period before the recession.”