Financial constraints and intangible investments. Do innovative and non-innovative firms differ?

Sandro Montresor () and Antonio Vezzani

No 2019-07, JRC Working Papers on Corporate R&D and Innovation from Joint Research Centre

Abstract: We investigate the extent to which financial constraints hamper the firms’ investment in intangibles. Drawing on the extant literature, we maintain that a distinction should be kept between innovators and non-innovators. Moreover, we argue that such a distinction should be investigated along the whole spectrum of intangibles firms invest and by addressing the risks of reverse causality and simultaneity bias in the relationship. Through an original quasi-panel extension of a recent European Innobarometer survey, we estimate two sets of recursive bivariate probit models – for innovative and non-innovative firms’ investments – from which interesting results emerge. Financial barriers hamper the investment of both kinds of firms only for R&D, design, and organisation and business processes. With respect to other intangibles, instead, financial barriers act only on innovators (or non-innovators) or are even absent. Furthermore, the hampering role of financial barriers distributes differently across different intangibles between innovators and non-innovators.

Keywords: &D; intangibles; innovation; financial barriers. (search for similar items in EconPapers)
JEL-codes: O30 O32 O33 (search for similar items in EconPapers)
Date: 2019-12
New Economics Papers: this item is included in nep-acc, nep-cfn, nep-cse, nep-ent, nep-eur, nep-ino, nep-sbm and nep-tid
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ipt:wpaper:201907

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