R&D and Credit Rationing in SMEs

Maria Mancusi and Andrea Vezzulli ()

No 2013/12, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: We study the effects of credit rationing on Research and Development (R&D) investment using survey and accounting data on a large representative sample of manufacturing small and medium size enterprises (SMEs). Our econometric model accounts for the endogeneity of our credit rationing indicator and employs an innovative theory based identification strategy. We find that credit rationing has a significantly negative effect on both the probability to set up R&D activities and on the level of R&D spending (conditioned on the R&D decision), but the overall estimated reduction in R&D spending is largely to be associated with the first effect.

Keywords: R&D; credit rationing; Whited and Wu index; bivariate probit; IV Tobit (search for similar items in EconPapers)
JEL-codes: C35 D82 G21 O32 (search for similar items in EconPapers)
Date: 2013-07
New Economics Papers: this item is included in nep-cse, nep-ent, nep-ino and nep-sbm
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Related works:
Journal Article: R&D AND CREDIT RATIONING IN SMEs (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ise:isegwp:wp122013

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