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THE DETERMINANTS OF INNOVATION: WHAT IS THE ROLE OF RISK? *
Author(s) -
MURRO PIERLUIGI
Publication year - 2013
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2012.02286.x
Subject(s) - sample (material) , business , industrial organization , financial innovation , economics , default risk , large sample , credit risk , finance , chemistry , statistics , mathematics , chromatography
Because of its importance in explaining growth, the topic of innovation has received a huge attention in the economic literature. The present study aims at contributing to analyse the determinants of innovation, with a special focus on firm risk. Employing a rich sample of Italian manufacturing firms, we tested for the impact on innovation of the riskiness of the firm, as proxied by the probability of default. We found that riskiness of enterprise reduces the tendency to innovate for the firms. The main channel through which firm risk affects innovation capability appears to be that of innovation financing.