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Access to Credit for Small Innovative Businesses
Author(s) -
dalla Pellegrina Lucia,
Frazzoni Serena,
Rotondi Zeno,
Vezzulli Andrea
Publication year - 2017
Publication title -
economic notes
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.274
H-Index - 19
eISSN - 1468-0300
pISSN - 0391-5026
DOI - 10.1111/ecno.12084
Subject(s) - credit rationing , business , sample (material) , instrumental variable , bank credit , product (mathematics) , product innovation , survey data collection , process (computing) , industrial organization , finance , economics , interest rate , econometrics , chemistry , statistics , geometry , mathematics , chromatography , computer science , operating system
Using data for a large sample of small firms collected through the 8th UniCredit Survey conducted in 2011, we investigate the extent to which banks of different size reward innovative firms, in terms of both access to lending and volume of credit granted. We find that more innovative firms are associated with weak credit rationing. Using instrumental variable techniques to manage the endogenous nature of innovation, we show that a large bank more strongly supports product innovation, whereas there is no substantial difference in the extent to which small and large banks provide credit to small firms undertaking process innovations.