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Subsidies, financial constraints and firm innovative activities in developing economies

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  • Simona Mateut

Abstract

This paper extends the investigation on the relationship between public subsidies and innovation to firms in developing economies. The analysis merges the innovation subsidy literature with the stream focusing on financial constraints for innovation. Innovation is defined broadly to include the introduction of new products or services and the upgrade of existing ones, which is relevant for developing economies. The results obtained using a range of econometric techniques and alternative measures of financial constraints suggest a positive correlation between public subsidies and the innovative activities of 11,998 firms across thirty Eastern Europe and Central Asia countries.

Suggested Citation

  • Simona Mateut, 2015. "Subsidies, financial constraints and firm innovative activities in developing economies," Discussion Papers 2015/11, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    • Handle: RePEc:not:notcfc:15/11
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    File URL: https://www.nottingham.ac.uk/cfcm/documents/papers/cfcm-2015-11.pdf
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    Keywords

    innovation; subsidies; financial constraints;
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