 Industrial districts and financial constraints to innovationElisa Ughetto International Review of Applied Economics, 2009, vol. 23, issue 5, 597-624 Abstract: Informational frictions between borrowers and lenders are particularly acute for innovative firms undertaking high-risk projects. As a consequence, banks may end up denying credit to them. However, the literature on relationship finance predicts that a closer relationship between credit suppliers and obligors is deemed to alleviate information asymmetries, hence preventing credit rationing from occurring. The question of whether such situations also apply to innovative firms has so far remained relatively unexplored. Using a cross-section of Italian manufacturing firms, I find that credit constraints appear to be more severe for firms undertaking innovative activities, although such effects are weaker when measures of R&D intensity are included. The empirical analysis also shows that firms located in an industrial district have easier access to external finance. If I move to consider firms engaged in substantial R&D activities located in a district, results suggest that they can benefit from better financial conditions. Keywords: industrial districts; relationship finance; credit rationing; innovation (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:taf:irapec:v:23:y:2009:i:5:p:597-624 Ordering information: This journal article can be ordered from DOI: 10.1080/02692170903007599 Access Statistics for this article International Review of Applied Economics is currently edited by Professor Malcolm Sawyer More articles in International Review of Applied Economics from Taylor & Francis Journals |
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