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RISK AVERSION AND ENTREPRENEURSHIP: FINANCING INNOVATION FOR SMES ACROSS EUROPE. EVIDENCE FROM MULTILEVEL MODELS

Francesco Aiello (), Graziella Bonanno () and Stefania Patrizia Sonia Rossi ()
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Stefania Patrizia Sonia Rossi: Dipartimento di Scienze Economiche, Aziendali, Matematiche e Statistiche "Bruno de Finetti" - DEAMS, Università degli Studi di Trieste

No 201902, Working Papers from Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF

Abstract: This paper aims to evaluate the role played by different sources of finance when analysing firms’ attitudes to innovate. The empirical investigation is based on the firm-level data for a large sample of European SMEs across the 2012–2017 period. Different measures of finance and several robustness checks are used to select a well-behaved probit multilevel model. Importantly, results show that the probability to innovate increases when firms use internal finance and grants. The same applies when funds come from family and friend channels, while no conclusive evidence is found for bank loans.

Keywords: Product innovation; Financing sources; Multilevel model; Firm heterogeneity; Country effect (search for similar items in EconPapers)
JEL-codes: O31 D21 (search for similar items in EconPapers)
Date: 2019-01
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http://www.ecostat.unical.it/RePEc/WorkingPapers/WP02_2019.pdf First version, 2019-01 (application/pdf)

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