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R&D AND CREDIT RATIONING IN SMEs
Author(s) -
Mancusi Maria Luisa,
Vezzulli Andrea
Publication year - 2014
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12080
Subject(s) - credit rationing , economics , endogeneity , rationing , investment (military) , sample (material) , microeconomics , monetary economics , econometrics , interest rate , health care , chemistry , chromatography , politics , political science , law , economic growth
We study the effects of credit rationing on research and development (R&D) investment using survey and accounting data on a large representative sample of manufacturing small‐ and medium‐sized enterprises ( SMEs ). Our econometric model accounts for the endogeneity of our credit rationing indicator and employs an innovative theory‐based identification strategy. We find that credit rationing has a significantly negative effect on both the probability to set up R&D activities and on the level of R&D spending (conditioned on the R&D decision), but the overall estimated reduction in R&D spending is largely to be associated with the first effect . ( JEL G21, D82, O32, C35)
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