Financing constraints and the timing of innovations in the German services sector

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Financing constraints and the timing of innovations in the German services sector

Kukuk, Martin; Stadler, Manfred
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URI: http://nbn-resolving.de/urn:nbn:de:bsz:21-opus-21314
http://hdl.handle.net/10900/47452
Dokumentart: WorkingPaper
Date: 1999
Source: Tübinger Diskussionsbeiträge der Wirtschaftswissenschaftlichen Fakultät ; 159
Language: English
Faculty: 6 Wirtschafts- und Sozialwissenschaftliche Fakultät
Department: Wirtschaftswissenschaften
DDC Classifikation: 330 - Economics
Keywords: Innovation
Other Keywords:
Innovation , Financial Constraints , Ordinal Regressors , Indirect Inference Estimation
License: http://tobias-lib.uni-tuebingen.de/doku/lic_ohne_pod.php?la=de http://tobias-lib.uni-tuebingen.de/doku/lic_ohne_pod.php?la=en
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Abstract:

Using newly available data at the firm level, this study provides convincing evidence of the importance of financial constraints in explaining the timing of innovations in the German services sector. Based on a dynamic model of firms' optimal R&D behavior under financial constraints, we estimate various versions of an econometric specification of the model with dichotomous innovation data by using a univariate ordered probit model. Our results are consistent with the theoretical view that, because of capital markets imperfections, internal finance should be an important determinant of innovative activities by private firms in the manufacturing sector as well as in the services sector.

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