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Title:How do banks screen innovative firms? Evidence from start-up panel data PDF Logo
Authors:Brown, Martin
Degryse, Hans
Höwer, Daniel
Penas, María Fabiana
Issue Date:2012
Series/Report no.:ZEW Discussion Papers 12-032
Abstract:Start-up firms often face difficulties in raising external funds. Employing a unique panel dataset covering 9,715 start-up firms over the period 2007-2009, we find that high-tech startups are less likely to use bank finance and face more difficulties in raising bank finance than low-tech start-ups. We find that external credit scores do affect the availability of credit for start-up firms, but that banks rely less on external rating information in their decision making for high-tech start-ups than low-tech start-ups. Start-ups that have their main relation with a small bank use more bank finance and report less difficulties in getting credit. By contrast, a greater expertise of the bank in the firm's industry is not associated with fewer difficulties to get bank loans. There are no differences between high-tech and low-tech start-ups regarding the impact of bank size.
Subjects:Innovation
Start-up
Credit information sharing
Soft information
JEL:G2
G18
O16
P34
Persistent Identifier of the first edition:urn:nbn:de:bsz:180-madoc-323065
Document Type:Working Paper
Appears in Collections:ZEW Discussion Papers
Publikationen von Forscherinnen und Forschern des ZEW

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