Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/45853
Authors: 
Hottenrott, Hanna
Peters, Bettina
Year of Publication: 
2011
Series/Report no.: 
ZEW Discussion Papers 09-081 [rev.]
Abstract: 
This study presents a novel empirical approach to identify financing constraints for innovation based on the concept of an ideal test as suggested by Hall (2008). Firms were offered a hypothetical payment and were asked to choose between alternatives of use. If they selected additional innovation projects, they must have had some unexploited investment opportunities that were not profitable using more costly external finance. We attribute constraints for innovation not only to lacking financing, but also to firms' innovative capability. Econometric results show that financial constraints do not depend on the availability of internal funds per se, but that they are driven by innovative capability.
Subjects: 
Innovation
financing constraints
innovative capability
multivariate probit models
JEL: 
O31
O32
C35
Document Type: 
Working Paper

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