Journal
RESEARCH POLICY
Volume 41, Issue 3, Pages 580-591Publisher
ELSEVIER
DOI: 10.1016/j.respol.2012.01.001
Keywords
R&D subsidies; Government policy; SMEs; Financial constraints; Certification hypothesis; Behavioural additionality
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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. Using a unique Belgian dataset of 1107 approved requests and a control group of denied requests for a specific type of R&D grant, we examine the impact of subsidies on small firms' access to external equity, short term and long term debt financing. We find that obtaining an R&D subsidy provides a positive signal about SME quality and results in better access to long-term debt. (C) 2012 Elsevier B.V. All rights reserved.
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