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http://hdl.handle.net/10419/31720
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| Title: | | Financial signalling by innovative nascent entrepreneurs  |
| Authors: | | Audretsch, David B. Bönte, Werner Mahagaonkar, Prashanth |
| Issue Date: | | 2009 |
| Series/Report no.: | | Jena economic research papers 2009,012 |
| Abstract: | | External finance is central for nascent entrepreneurs, people in the process of starting new ventures. We argue that nascent entrepreneurs use patents and prototypes in order to signal their ability to appropriate the returns from their innovation as well as the project´s feasibility. Our analysis of 900 nascent entrepreneurs finds that patents and prototypes increase the likelihood of obtaining equity finance. Thus, if signals are credible, innovation positively impacts external financing. Interestingly, entrepreneurs in planning versus early start-up stage portray different signaling effects, indicating that the relation between finance and innovation depends on the stage of a start-up lifecycle. |
| Subjects: | | Innovation entrepreneurship finance Information Asymmetries |
| JEL: | | L26 M13 G14 G24 G32 O34 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Jena Economic Research Papers, MPI für Ökonomik
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