Credit Constrained R&D Spending and Technological Change

Aßmuth P (2014) Working Papers in Economics and Management; 16-2014.
Bielefeld: Bielefeld University, Department of Business Administration and Economics.

Diskussionspapier | Veröffentlicht| Englisch
 
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Autor*in
Aßmuth, Pascal
Abstract / Bemerkung
Firms often rely on external financing in order to conduct R&D. The question is to what extent discriminatory behaviour of the funds provider affects the industry evolution. The model is based on an evolutionary framework by Nelson and Winter. A firm chooses its R&D spending in an adaptive fashion where technological improvement is essential for survival in the competitive market. Firms can finance their activities by using retained profits or applying for credit. However, they have a clear hierarchy in choosing the source of funds and saved profits are always used up first. There is endogenous discriminatory lending as the banking sector provides credit according to firms’ individual features. It compares profitability and market share across firms when assessing creditworthiness. The model is able to capture features of innovation and diffusion of technology. Results show that the availability of credit is crucial for technological change in a non-linear fashion and that the industry evolves faster if the bank values market share more in assessing creditworthiness.
Stichworte
Heterogeneous Agents Models; Innovation; Financial Constraints
Erscheinungsjahr
2014
Band
16-2014
Seite(n)
36
ISSN
2196-2723
Page URI
https://pub.uni-bielefeld.de/record/2915535

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Aßmuth P. Credit Constrained R&D Spending and Technological Change. Working Papers in Economics and Management. Vol 16-2014. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2014.
Aßmuth, P. (2014). Credit Constrained R&D Spending and Technological Change (Working Papers in Economics and Management, 16-2014). Bielefeld: Bielefeld University, Department of Business Administration and Economics. doi:10.4119/unibi/2915535
Aßmuth, P. (2014). Credit Constrained R&D Spending and Technological Change. Working Papers in Economics and Management, 16-2014, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
Aßmuth, P., 2014. Credit Constrained R&D Spending and Technological Change, Working Papers in Economics and Management, no.16-2014, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
P. Aßmuth, Credit Constrained R&D Spending and Technological Change, Working Papers in Economics and Management, vol. 16-2014, Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2014.
Aßmuth, P.: Credit Constrained R&D Spending and Technological Change. Working Papers in Economics and Management, 16-2014. Bielefeld University, Department of Business Administration and Economics, Bielefeld (2014).
Aßmuth, Pascal. Credit Constrained R&D Spending and Technological Change. Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2014. Working Papers in Economics and Management. 16-2014.
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