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The demand and supply of external finance for innovative firms

Mina, Andrea; Lahr, Henry and Hughes, Alan (2013). The demand and supply of external finance for innovative firms. Industrial and Corporate Change, 22(4) pp. 869–901.

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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.

Item Type: Journal Item
Copyright Holders: 2013 The Authors. Published by Oxford University Press on behalf of Associazione ICC.
ISSN: 1464-3650
Project Funding Details:
Funded Project NameProject IDFunding Body
Seventh Framework Programme (FP7/2007-2013)Grant agreement no. 217466EU
Not SetEP/E0236141/1EPSRC (Engineering and Physical Sciences Research Council)
Academic Unit/School: Faculty of Business and Law (FBL) > Business > Department for Accounting and Finance
Faculty of Business and Law (FBL) > Business
Faculty of Business and Law (FBL)
Item ID: 39920
Depositing User: Henry Lahr
Date Deposited: 11 Apr 2014 13:21
Last Modified: 07 Dec 2018 10:22
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