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Strathprints serves world leading Open Access research by the University of Strathclyde, including research by the Strathclyde Institute of Pharmacy and Biomedical Sciences (SIPBS), where research centres such as the Industrial Biotechnology Innovation Centre (IBioIC), the Cancer Research UK Formulation Unit, SeaBioTech and the Centre for Biophotonics are based.

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Are small innovators credit rationed?

Freel, M. (2007) Are small innovators credit rationed? Small Business Economics, 28 (1). pp. 23-35.

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Abstract

Drawing upon a sample of 256 small firms who applied for bank loans, the current paper is concerned with the extent to which 'innovativeness' is associated with a lower level of loan application success. The paper records the proportion of loan successfully applied for and estimates a series of tobit models utilising a number of proxy measures for innovation (in terms of inputs, outputs, and commercial significance to the firm) and incorporating standard controls. In general, the models suggest (as anticipated) that the most innovative firms are less successful in loan markets than their less innovative peers - though there is some variation by proxy. Moreover, there is tentative evidence that 'a little innovation may be a good thing'.