Innovation and SME finance: evidence from developing countries
Date
2019
Authors
Wellalage, N.H.
Fernandez, V.
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Journal article
Citation
International Review of Financial Analysis, 2019; 66(101370):1-14
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Abstract
This paper explores the relationship between firm-level innovation and external finance for small and medium enterprises (SMEs). Our sample consists of 13,430 firms from Eastern Europe and Central Asian countries. A propensity score matching approach reports a positive relationship between formal finance and product and process innovation, which is greater for early-stage SMEs than for mature counterparts. However, informal finance has more significant impact on mature firms' product innovation. Our empirical evidence highlights policy implications for countries desiring to enhance the innovation of their SMEs by improving the external finance of these SMEs.
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Link to a related website: https://unpaywall.org/10.1016/j.irfa.2019.06.009, Open Access via Unpaywall
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Copyright 2022 Elsevier