IDEAS home Printed from https://ideas.repec.org/a/kap/jtecht/v47y2022i1d10.1007_s10961-020-09842-1.html
   My bibliography  Save this article

Financial constraints to investing in intangibles: Do innovative and non-innovative firms differ?

Author

Listed:
  • Sandro Montresor

    (Gran Sasso Science Institute (GSSI))

  • Antonio Vezzani

    (Roma Tre University)

Abstract

This paper investigates the extent to which financial constraints on investments in intangible activities differ with respect to the kind of intangible and to the firms’ innovative status. Through an original pseudo-panel extension of a recent European Innobarometer survey, we are capable to address these research questions by attenuating the risks of reverse causality and simultaneity bias and to obtain interesting new results. Financial barriers significantly hamper the firms’ investments in intangibles with respect to R&D, design, software, and organisation or business process improvements. With respect to branding and reputation, and training, instead, financial constraints do not emerge to hinder the relative investments. Furthermore, while innovative firms tend to invest more in intangibles, the hampering role of financial barriers does not seem to differ between innovative and non-innovative firms. Financial barriers reduce firms’ investments in intangibles selectively, but the strength of this effect is the same in deterring and in restraining their possible innovative use by non-innovative and innovative firms, respectively.

Suggested Citation

  • Sandro Montresor & Antonio Vezzani, 2022. "Financial constraints to investing in intangibles: Do innovative and non-innovative firms differ?," The Journal of Technology Transfer, Springer, vol. 47(1), pages 1-32, February.
    • Handle: RePEc:kap:jtecht:v:47:y:2022:i:1:d:10.1007_s10961-020-09842-1
    DOI: 10.1007/s10961-020-09842-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10961-020-09842-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10961-020-09842-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ramana Nanda & William R. Kerr, 2015. "Financing Innovation," Annual Review of Financial Economics, Annual Reviews, vol. 7(1), pages 445-462, December.
    2. Mairesse, Jacques & Mohnen, Pierre, 2010. "Using Innovation Surveys for Econometric Analysis," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1129-1155, Elsevier.
    3. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    4. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    5. Emanuele Brancati, 2015. "Innovation financing and the role of relationship lending for SMEs," Small Business Economics, Springer, vol. 44(2), pages 449-473, February.
    6. Frederique Savignac, 2008. "Impact Of Financial Constraints On Innovation: What Can Be Learned From A Direct Measure?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(6), pages 553-569.
    7. Hölzl, Werner & Janger, Jürgen, 2014. "Distance to the frontier and the perception of innovation barriers across European countries," Research Policy, Elsevier, vol. 43(4), pages 707-725.
    8. Carol Corrado & Charles Hulten & Daniel Sichel, 2005. "Measuring Capital and Technology: An Expanded Framework," NBER Chapters, in: Measuring Capital in the New Economy, pages 11-46, National Bureau of Economic Research, Inc.
    9. Biondi, Yuri & Rebérioux, Antoine, 2012. "The governance of intangibles: Rethinking financial reporting and the board of directors," Accounting forum, Elsevier, vol. 36(4), pages 279-293.
    10. Jacques Mairesse & Pierre Mohnen, 2005. "The Importance of R&D for Innovation: A Reassessment Using French Survey Data," The Journal of Technology Transfer, Springer, vol. 30(2_2), pages 183-197, January.
    11. Dirk Czarnitzki, 2006. "Research And Development In Small And Medium‐Sized Enterprises: The Role Of Financial Constraints And Public Funding," Scottish Journal of Political Economy, Scottish Economic Society, vol. 53(3), pages 335-357, July.
    12. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 339-376.
    13. Pablo D'Este & Francesco Rentocchini & Jaider Vega-Jurado, 2014. "The Role of Human Capital in Lowering the Barriers to Engaging in Innovation: Evidence from the Spanish Innovation Survey," Industry and Innovation, Taylor & Francis Journals, vol. 21(1), pages 1-19, January.
    14. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
    15. Gómez, Jaime & Vargas, Pilar, 2012. "Intangible resources and technology adoption in manufacturing firms," Research Policy, Elsevier, vol. 41(9), pages 1607-1619.
    16. Zvi Griliches, 1998. "R&D and Productivity: The Econometric Evidence," NBER Books, National Bureau of Economic Research, Inc, number gril98-1.
    17. Filipe Silva & Carlos Carreira, 2012. "Do financial constraints threat the innovation process? Evidence from Portuguese firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(8), pages 701-736, November.
    18. Baldwin, John & Lin, Zhengxi, 2002. "Impediments to advanced technology adoption for Canadian manufacturers," Research Policy, Elsevier, vol. 31(1), pages 1-18, January.
    19. Richard R. Nelson, 1991. "Why do firms differ, and how does it matter?," Strategic Management Journal, Wiley Blackwell, vol. 12(S2), pages 61-74, December.
    20. Mowery, David & Rosenberg, Nathan, 1993. "The influence of market demand upon innovation: A critical review of some recent empirical studies," Research Policy, Elsevier, vol. 22(2), pages 107-108, April.
    21. Mafini Dosso & Antonio Vezzani, 2020. "Firm market valuation and intellectual property assets," Industry and Innovation, Taylor & Francis Journals, vol. 27(7), pages 705-729, August.
    22. Galia, Fabrice & Legros, Diego, 2004. "Complementarities between obstacles to innovation: evidence from France," Research Policy, Elsevier, vol. 33(8), pages 1185-1199, October.
    23. Pellegrino, Gabriele & Piva, Mariacristina & Vivarelli, Marco, 2012. "Young firms and innovation: A microeconometric analysis," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 329-340.
    24. Lee, Neil & Sameen, Hiba & Cowling, Marc, 2015. "Access to finance for innovative SMEs since the financial crisis," Research Policy, Elsevier, vol. 44(2), pages 370-380.
    25. Arrighetti, Alessandro & Landini, Fabio & Lasagni, Andrea, 2014. "Intangible assets and firm heterogeneity: Evidence from Italy," Research Policy, Elsevier, vol. 43(1), pages 202-213.
    26. Mohnen, Pierre & Rosa, Julio, 2001. "Les obstacles à l’innovation dans les industries de services au Canada," L'Actualité Economique, Société Canadienne de Science Economique, vol. 77(2), pages 231-254, juin.
    27. P. Mohnen & F. Palm & S. Loeff & A. Tiwari, 2008. "Financial Constraints and Other Obstacles: are they a Threat to Innovation Activity?," De Economist, Springer, vol. 156(2), pages 201-214, June.
    28. Bronwyn H. Hall & Nathan Rosenberg (ed.), 2010. "Handbook of the Economics of Innovation," Handbook of the Economics of Innovation, Elsevier, edition 1, volume 1, number 1.
    29. Roper, Stephen & Micheli, Pietro & Love, James H. & Vahter, Priit, 2016. "The roles and effectiveness of design in new product development: A study of Irish manufacturers," Research Policy, Elsevier, vol. 45(1), pages 319-329.
    30. Gabriele Pellegrino, 2018. "Barriers to innovation in young and mature firms," Journal of Evolutionary Economics, Springer, vol. 28(1), pages 181-206, January.
    31. Carol Corrado & John Haltiwanger & Daniel Sichel, 2005. "Measuring Capital in the New Economy," NBER Books, National Bureau of Economic Research, Inc, number corr05-1.
    32. Cristiano Antonelli & Giuseppe Scellato, 2011. "Out-of-equilibrium profit and innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(5), pages 405-421.
    33. Davide Antonioli & Alberto Marzucchi & Maria Savona, 2017. "Pain shared, pain halved? Cooperation as a coping strategy for innovation barriers," The Journal of Technology Transfer, Springer, vol. 42(4), pages 841-864, August.
    34. Hall, Bronwyn H. & Lerner, Josh, 2010. "The Financing of R&D and Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 609-639, Elsevier.
    35. Campello, Murillo & Graham, John R. & Harvey, Campbell R., 2010. "The real effects of financial constraints: Evidence from a financial crisis," Journal of Financial Economics, Elsevier, vol. 97(3), pages 470-487, September.
    36. David Gago & Luis Rubalcaba, 2007. "Innovation and ICT in service firms: towards a multidimensional approach for impact assessment," Journal of Evolutionary Economics, Springer, vol. 17(1), pages 25-44, February.
    37. Andrea Mina & Henry Lahr & Alan Hughes, 2013. "The demand and supply of external finance for innovative firms," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(4), pages 869-901, August.
    38. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45, National Bureau of Economic Research, Inc.
    39. Mariagrazia Squicciarini & Marie Le Mouel, 2012. "Defining and Measuring Investment in Organisational Capital: Using US Microdata to Develop a Task-based Approach," OECD Science, Technology and Industry Working Papers 2012/5, OECD Publishing.
    40. Mark Freel, 2007. "Are Small Innovators Credit Rationed?," Small Business Economics, Springer, vol. 28(1), pages 23-35, January.
    41. Thum-Thysen, Anna & Voigt, Peter & Bilbao-Osorio, Beñat & Maier, Christoph & Ognyanova, Diana, 2019. "Investment dynamics in Europe: Distinct drivers and barriers for investing in intangible versus tangible assets?," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 77-88.
    42. Sandro Montresor & Antonio Vezzani, 2020. "Design centrality, design investments and innovation performance: an empirical analysis of European firms," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(2), pages 351-374.
    43. David Audretsch & Erik Lehmann & Stefano Paleari & Silvio Vismara, 2016. "Entrepreneurial finance and technology transfer," The Journal of Technology Transfer, Springer, vol. 41(1), pages 1-9, February.
    44. Bronwyn H. Hall & Francesca Lotti & Jacques Mairesse, 2013. "Evidence on the impact of R&D and ICT investments on innovation and productivity in Italian firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 22(3), pages 300-328, April.
    45. Marina Candi, 2006. "Design As An Element Of Innovation: Evaluating Design Emphasis In Technology-Based Firms," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 10(04), pages 351-374.
    46. Albert N. Link & F. M. Scherer (ed.), 2005. "Essays in Honor of Edwin Mansfield," Springer Books, Springer, number 978-0-387-25022-9, January.
    47. Dominique Tourigny & Can Le, 2004. "Impediments to innovation faced by Canadian manufacturing firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(3), pages 217-250.
    48. Bronwyn H. Hall & Pietro Moncada-Paternò-Castello & Sandro Montresor & Antonio Vezzani, 2016. "Financing constraints, R&D investments and innovative performances: new empirical evidence at the firm level for Europe," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(3), pages 183-196, April.
    49. D’Este, Pablo & Iammarino, Simona & Savona, Maria & von Tunzelmann, Nick, 2012. "What hampers innovation? Revealed barriers versus deterring barriers," Research Policy, Elsevier, vol. 41(2), pages 482-488.
    50. Gaganan Awano & Mark Franklin & Jonathan Haskel & Zafeira Kastrinaki, 2010. "Measuring investment in intangible assets in the UK: results from a new survey," Economic & Labour Market Review, Palgrave Macmillan;Office for National Statistics, vol. 4(7), pages 66-71, July.
    51. Daria Ciriaci, 2017. "Intangible resources: the relevance of training for European firms’ innovative performance," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(1), pages 31-54, April.
    52. Griliches, Zvi, 1998. "R&D and Productivity," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226308869.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Antonelli, Cristiano & Orsatti, Gianluca & Pialli, Guido, 2023. "Out of Equilibrium and Intangible Assets," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202323, University of Turin.
    2. Cristiano Antonelli & Gianluca Orsatti & Guido Pialli, 2023. "The effects of the limited exhaustibility of knowledge on firm size and the direction of technological change," The Journal of Technology Transfer, Springer, vol. 48(4), pages 1359-1385, August.
    3. Zhenxu Guo & Jiarui Shen & Lihong Li, 2024. "Identifying the implementation effect of technology transfer policy using system dynamics: a case study in Liaoning, China," The Journal of Technology Transfer, Springer, vol. 49(2), pages 660-688, April.
    4. Cristiano Antonelli & Gianluca Orsatti & Guido Pialli, 2023. "The knowledge-intensive direction of technological change," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(1), pages 1-27, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sandro Montresor & Antonio Vezzani, 2019. "Financial constraints and intangible investments. Do innovative and non-innovative firms differ?," JRC Working Papers on Corporate R&D and Innovation 2019-07, Joint Research Centre.
    2. Sandro Montresor & Antonio Vezzani, 2016. "Intangible investments and innovation propensity: Evidence from the Innobarometer 2013," Industry and Innovation, Taylor & Francis Journals, vol. 23(4), pages 331-352, May.
    3. García-Quevedo, José & Segarra-Blasco, Agustí & Teruel, Mercedes, 2018. "Financial constraints and the failure of innovation projects," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 127-140.
    4. Zahler, Andrés & Goya, Daniel & Caamaño, Matías, 2022. "The primacy of demand and financial obstacles in hindering innovation," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    5. Gabriele Pellegrino, 2015. "Barriers to innovation: can firm age help lower them?," Working Papers 2015/3, Institut d'Economia de Barcelona (IEB).
    6. Ortiz, Rodrigo & Fernandez, Viviana, 2022. "Business perception of obstacles to innovate: Evidence from Chile with pseudo-panel data analysis," Research in International Business and Finance, Elsevier, vol. 59(C).
    7. Pinget, Amandine, 2016. "Spécificités des déterminants des innovations environnementales : une approche appliquée aux PME [Specificities of determinants for environmental innovation : an approach applied to SMEs]," MPRA Paper 80108, University Library of Munich, Germany.
    8. Mattia Di Ubaldo & Iulia Siedschlag, 2021. "Investment in Knowledge‐Based Capital and Productivity: Firm‐Level Evidence from a Small Open Economy," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 363-393, June.
    9. Gabriele Pellegrino, 2018. "Barriers to innovation in young and mature firms," Journal of Evolutionary Economics, Springer, vol. 28(1), pages 181-206, January.
    10. Vicente Salas-Fumás & Javier Ortiz, 2019. "Innovations’ Success and Failure in the Business Cycle," Sustainability, MDPI, vol. 11(15), pages 1-22, August.
    11. Davide Antonioli & Alberto Marzucchi & Maria Savona, 2017. "Pain shared, pain halved? Cooperation as a coping strategy for innovation barriers," The Journal of Technology Transfer, Springer, vol. 42(4), pages 841-864, August.
    12. Schäfer, Dorothea & Stephan, Andreas & Mosquera, Jenniffer Solórzano, 2017. "Family ownership: does it matter for funding and success of corporate innovations?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 48(4), pages 931-951.
    13. Georgios Efthyvoulou & Priit Vahter, 2016. "Financial Constraints, Innovation Performance and Sectoral Disaggregation," Manchester School, University of Manchester, vol. 84(2), pages 125-158, March.
    14. Rajeev K. Goel & James W. Saunoris, 2022. "Foreign direct investment (FDI): friend or foe of non-innovating firms?," The Journal of Technology Transfer, Springer, vol. 47(4), pages 1162-1178, August.
    15. Amandine Pinget & Rachel Bocquet & Caroline Mothe, 2015. "Barriers to Environmental Innovation in SMEs: Empirical Evidence from French Firms," Post-Print hal-01300837, HAL.
    16. Pietro Moncada-Paternò-Castello, 2022. "Top R&D investors, structural change and the R&D growth performance of young and old firms," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(1), pages 1-33, March.
    17. Sasan Bakhtiari & Robert Breunig & Lisa Magnani & Jacquelyn Zhang, 2020. "Financial Constraints and Small and Medium Enterprises: A Review," The Economic Record, The Economic Society of Australia, vol. 96(315), pages 506-523, December.
    18. Wellalage, Nirosha Hewa & Locke, Stuart, 2020. "Formal credit and innovation: Is there a uniform relationship across types of innovation?," International Review of Economics & Finance, Elsevier, vol. 70(C), pages 1-15.
    19. de-Oliveira, Fernando & Rodil-Marzábal, Óscar, 2019. "Structural characteristics and organizational determinants as obstacles to innovation in small developing countries," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 306-314.
    20. Sasidharan, Subash & Jijo Lukose, P.J. & Komera, Surenderrao, 2015. "Financing constraints and investments in R&D: Evidence from Indian manufacturing firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 55(C), pages 28-39.

    More about this item

    Keywords

    R&D; Intangibles; Innovation; Financial barriers;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jtecht:v:47:y:2022:i:1:d:10.1007_s10961-020-09842-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.