R&D AND CREDIT RATIONING IN SMEs

Maria Mancusi and Andrea Vezzulli ()

Economic Inquiry, 2014, vol. 52, issue 3, 1153-1172

Abstract: type="main" xml:id="ecin12080-abs-0001"> 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-sized 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. ( JEL G21, D82, O32, C35)

Date: 2014
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Working Paper: R&D and Credit Rationing in SMEs (2013)
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