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Determinants of Financing Decisions in Innovative Firms: A Review on Theoretical Backgrounds and Empirical Evidence

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  • Mihaela Diaconu

    (†Gheorghe Asachi†Technical University of Iasi)

Abstract

We review some of the main aspects highlighted in the literature on financing innovation. Thetheoretical background related to the distinctive features of innovative firms impacting theirfinancing decisions and the empirical evidence is reviewed. The growing literature on the financingof innovation shows that the theoretical and empirical work are not always constant across thevarious samples and situations faced by firms as a result of generating new findings. We highlightthe interaction between financing choices for innovation and changing internal and externalcondition firms operate.

Suggested Citation

  • Mihaela Diaconu, 2016. "Determinants of Financing Decisions in Innovative Firms: A Review on Theoretical Backgrounds and Empirical Evidence," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 198-203, February.
    • Handle: RePEc:ovi:oviste:v:xvi:y:2016:i:2:p:198-203
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    1. Hall, Bronwyn H., 1992. "Investment and Research and Development at the Firm Level: Does the Source of Financing Matter?," Department of Economics, Working Paper Series qt5j59j6x3, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    2. 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.
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    7. Hochberg, Yael V. & Serrano, Carlos J. & Ziedonis, Rosemarie H., 2018. "Patent collateral, investor commitment, and the market for venture lending," Journal of Financial Economics, Elsevier, vol. 130(1), pages 74-94.
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    More about this item

    Keywords

    capital market; cost of capital; firm; innovation; R&D;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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