Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229033
Authors: 
Bonanno, Graziella
Ferrando, Annalisa
Rossi, Stefania
Year of Publication: 
2020
Series/Report no.: 
ECB Working Paper No. 2419
Abstract: 
This paper aims at investigating the relationship between firms' profit efficiency, access to finance and innovation activities. We enrich our understanding on firms' performance by adopting the stochastic frontier approach (SFA), which allows us to estimate profit functions and to obtain efficiency scores for a large sample of European firms. We pioneer the use of a novel dataset that merges survey-based data derived from the ECB Survey on access to finance for enterprises (SAFE) with balance sheet information. Our evidence documents that credit constrained firms display an incentive to improve their efficiency in order to increase profitability. Among firms that have embarked in product innovation, those in the industry and high-tech sectors see their effort translated in higher profit efficiency. From a policy perspective, our results could help to better understand the link between innovation, financial constraints and efficiency, which goes beyond the idea that easier access to finance is the panacea to get higher profit efficiency.
Subjects: 
Stochastic Frontier Approach
access to finance
innovation
survey data
JEL: 
D22
D24
L23
O31
C33
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-4062-7
Document Type: 
Working Paper

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