 Debt financing of SMEs: The certification role of R&D SubsidiesAndrea Bellucci, Luca Pennacchio and Alberto Zazzaro () International Review of Financial Analysis, 2023, vol. 90, issue C Abstract: This study investigates the (unintended) effects of public subsidies for research and development (R&D) on the debt financing of small and medium-sized enterprises (SMEs) by examining a public program implemented in the Marche region of Italy during the 2005–2012 period. The study combines matching methods with a difference-in-differences estimator to examine whether receiving public subsidies affects total indebtedness and the structure and cost of debt of awarded firms. The results indicate that R&D subsidies are associated with a modification of firm debt structure (especially for young, high-tech, and risky firms) in favor of long-term maturities and help firms limit the average cost of debt. Subsidies also foster the use of bank financing and reduce trade debt, but they do not affect the overall level of debt. Taken together, these findings suggest that the public funding of SME innovation projects plays a certification role in the access to external financial resources for firms receiving subsidies. Keywords: Debt financing; Debt structure; Finance gap; Certification effects; Resource effects; R&D subsidies (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:90:y:2023:i:c:s1057521923004192 DOI: 10.1016/j.irfa.2023.102903 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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