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The impact of financial management on innovation

Author

Listed:
  • Marcus Illmeyer

    (Pan-European University, Slovakia)

  • Dietmar Grosch

    (Pan-European University, Slovakia)

  • Maria Kittler

    (Pan-European University, Slovakia)

  • Pamela Priess

    (Pan-European University, Slovakia)

Abstract

In the current competitive market, innovation has become a crucial element for organizations, willing to grow. Financial management in this regard is playing a significant role in improving firms’ innovation capacity. This research paper evaluates the impact of financial management components on innovativeness of Austrian SMEs. Using data of 118 employees from 41 SMEs operating in Austria, the research finds a significant impact of the financial management model on firms’ innovation. The three components: liquidity, controlling, and financial literacy are statistically significant is explaining innovativeness at 1% level. The study suggests focus on the three financial management constructs in order to improve their innovation capability and capacity.

Suggested Citation

  • Marcus Illmeyer & Dietmar Grosch & Maria Kittler & Pamela Priess, 2017. "The impact of financial management on innovation," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 5(1), pages 58-71, September.
    • Handle: RePEc:ssi:jouesi:v:5:y:2017:i:1:p:58-71
    DOI: 10.9770/jesi.2017.5.1(5)
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    References listed on IDEAS

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    Cited by:

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    2. Antonio Molina-García & Julio Diéguez-Soto & M. Teresa Galache-Laza & Marta Campos-Valenzuela, 2023. "Financial literacy in SMEs: a bibliometric analysis and a systematic literature review of an emerging research field," Review of Managerial Science, Springer, vol. 17(3), pages 787-826, April.
    3. Bozena Chovancova & Vladimir Gvozdiak & Zoltan Rozsa & Rahman Ashiqur, 2019. "An Exposure of Commercial Banks in the Terms of an Impact of Government Bondholding with the Context of Its Risks and Implications," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 15(1), pages 173-188.
    4. García-Pérez-de-Lema, Domingo & Ruiz-Palomo, Daniel & Diéguez-Soto, Julio, 2021. "Analysing the roles of CEO's financial literacy and financial constraints on Spanish SMEs technological innovation," Technology in Society, Elsevier, vol. 64(C).

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    More about this item

    Keywords

    financial management; financial controlling; liquidity; financial literacy; innovativeness; innovation capacity;
    All these keywords.

    JEL classification:

    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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