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Sources of financing: Which ones are more effective in innovation–growth linkage?

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  • Anabela Marques Santos
  • Michele Cincera
  • Giovanni Cerulli

Abstract

The study assesses the impact of eight sources of financing (internal funds, bank loans, credit lines, trade credit, equity, grants, leasing and factoring) on innovation and firm growth. It provides evidence that not all external financing sources have the same impact on innovation and growth. Output additionality on turnover growth seems higher for equity financing. In contrast, employment growth appears to be more associated with financing sources linked to increased fixed assets or the solving of liquidity problems. The number of financing instruments used together also seems to matter, revealing the existence of complementarities.

Suggested Citation

  • Anabela Marques Santos & Michele Cincera & Giovanni Cerulli, 2024. "Sources of financing: Which ones are more effective in innovation–growth linkage?," ULB Institutional Repository 2013/372408, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/372408
    Note: SCOPUS: ar.j
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    References listed on IDEAS

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    1. Dawid, Herbert & Riedel, Frank & Steg, Jan-Henrik & Wen, Xingang, 2024. "Cash-constrained R&D Investment," Center for Mathematical Economics Working Papers 699, Center for Mathematical Economics, Bielefeld University.

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    More about this item

    Keywords

    Europe; Financing; Growth; Innovation;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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