Financing Innovation

Ramana Nanda and William Kerr

Annual Review of Financial Economics, 2015, vol. 7, issue 1, 445-462

Abstract: We review the recent literature on the financing of innovation, inclusive of large companies and new start-ups. This research strand has been very active over the past five years, generating important new findings, questioning some long-held beliefs, and creating its own puzzles. Our review outlines the growing body of work that documents a role for debt financing related to innovation. We highlight the new literature on learning and experimentation across multistage innovation projects and how this impacts optimal financing design. We further highlight the strong interaction between financing choices for innovation and changing external conditions, especially reduced experimentation costs.

Keywords: banks; entrepreneurship; experimentation; finance; innovation; venture capital (search for similar items in EconPapers)
JEL-codes: G21 G24 L26 M13 O31 O32 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (126)

Downloads: (external link)
http://dx.doi.org/10.1146/annurev-financial-111914-041825 (application/pdf)
Full text downloads are only available to subscribers. Visit the abstract page for more information.

Related works:
Working Paper: Financing innovation (2015)
Working Paper: Financing Innovation (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:anr:refeco:v:7:y:2015:p:445-462

Ordering information: This journal article can be ordered from
http://www.annualreviews.org/action/ecommerce

Access Statistics for this article

More articles in Annual Review of Financial Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA.
Bibliographic data for series maintained by http://www.annualreviews.org ().