Research and development: financial constraints and the role of public funding for small and medium-sized enterprises

Dirk Czarnitzki

No 02-74, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: This paper presents microeconometric evidence on financing con-traints for research and development activities in German small and medium?sized firms (SME). Special attention is paid to the role of public R&D subsidies. For this purpose SME in Western and East-ern Germany are compared because these regions are very different in their supply of public R&D funding. It turns out that Western German SME are financially constrained in their R&D activities by both internal and external resources. In Eastern Germany, firms are not sensitive to external constraints, possibly due to high public R&D subsidies. The results suggest that R&D in Eastern Germany is to a large extent driven by public subsidies since the German re?unification in 1990 and that the usual financial market mechanisms are repealed with respect to R&D in this region.

Keywords: Research and development; financial constraints; public funding; SME; censored regression models (search for similar items in EconPapers)
JEL-codes: C24 O31 O38 (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:531

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