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Are R&D companies credit-constrained? Credit frictions during and post-crisis

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  • Kadri Männasoo
  • Heili Hein
Abstract
Private research and development (R&D) and innovation activity is believed to fall below the socially optimal level. The credit constraints that R&D companies face due to asymmetric information and credit market imperfections may hinder innovation. This descriptive analysis aims to provide a comparative insight into the credit demand and supply patterns of R&D and non-R&D companies in Central and Eastern European countries during and after the Global Financial Crisis. The study uses company-level data from rounds IV and V of the Business Environment and Enterprise Performance Survey, covering the years 2007-2009 and 2012-2014. It reveals that the dependence of R&D companies on bank credit dropped significantly over the two survey rounds, mirroring substantial self-selection into R&D, with a smaller number of able and well-capitalised companies continuing R&D activity after the crisis. We do not subsequently find convincing evidence that R&D firms that remained in business after the crisis are notably credit-constrained.

Suggested Citation

  • Kadri Männasoo & Heili Hein, 2017. "Are R&D companies credit-constrained? Credit frictions during and post-crisis," TUT Economic Research Series 29, Department of Finance and Economics, Tallinn University of Technology.
  • Handle: RePEc:ttu:tuteco:29
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    References listed on IDEAS

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    Cited by:

    1. Erve Sõõru & Aaro Hazak & Marit Rebane, 2017. "Long working days and falling asleep at work – issues in R&D work efficiency," TUT Economic Research Series 38, Department of Finance and Economics, Tallinn University of Technology.
    2. Marit Rebane & Heili Hein & Aaro Hazak, 2017. "Does flexible work make R&D employees happier?," TUT Economic Research Series 23, Department of Finance and Economics, Tallinn University of Technology.
    3. Aaro Hazak, 2017. "Fixed-term contracts – a turnoff for R&D employees," TUT Economic Research Series 35, Department of Finance and Economics, Tallinn University of Technology.
    4. Kadri Männasoo & Heili Hein, 2017. "Learning from abroad: Export versus foreign ownership," TUT Economic Research Series 36, Department of Finance and Economics, Tallinn University of Technology.
    5. Viive Pille & Viiu Tuulik & Aaro Hazak, 2017. "Sitting at a desk at work makes creative employees tired," TUT Economic Research Series 34, Department of Finance and Economics, Tallinn University of Technology.
    6. Marko Virkebau & Aaro Hazak & Kadri Männasoo, 2017. "Using flexitime – for better work or a better life? Issues in R&D work efficiency," TUT Economic Research Series 27, Department of Finance and Economics, Tallinn University of Technology.
    7. Heili Hein & Kadri Männasoo, 2017. "Are business obstacles different for R&D companies?," TUT Economic Research Series 33, Department of Finance and Economics, Tallinn University of Technology.
    8. Kadri Männasoo & Heili Hein, 2017. "Capital investments and financing structure: Are R&D companies different?," TUT Economic Research Series 26, Department of Finance and Economics, Tallinn University of Technology.
    9. Aaro Hazak, 2017. "Non-creative tasks: a turn off for creative R&D employees," TUT Economic Research Series 28, Department of Finance and Economics, Tallinn University of Technology.
    10. Hang, Leiming & Lu, Wei & Ge, Xiaowei & Ye, Bin & Zhao, Zhiqi & Cheng, Fangfang, 2024. "R&D innovation, industrial evolution and the labor skill structure in China manufacturing," Technological Forecasting and Social Change, Elsevier, vol. 204(C).
    11. Aaro Hazak, 2017. "Better not to ask your employees to come to work? Issues in R&D work efficiency," TUT Economic Research Series 32, Department of Finance and Economics, Tallinn University of Technology.
    12. Raul Ruubel & Aaro Hazak, 2017. "Does anyone want to work 5 days per week and 8 hours per day? Issues in R&D work efficiency," TUT Economic Research Series 31, Department of Finance and Economics, Tallinn University of Technology.
    13. Marko Virkebau & Aaro Hazak & Kadri Männasoo, 2017. "More flexibility, better results? Issues in R&D work efficiency," TUT Economic Research Series 24, Department of Finance and Economics, Tallinn University of Technology.
    14. Marit Rebane & Aaro Hazak & Kadri Männasoo, 2017. "Women need flexible work, but men get it – issues in R&D work efficiency," TUT Economic Research Series 30, Department of Finance and Economics, Tallinn University of Technology.
    15. Heili Hein & Aaro Hazak & Kadri Männasoo, 2017. "Who has a better chance of getting higher salaries among creative R&D employees?," TUT Economic Research Series 39, Department of Finance and Economics, Tallinn University of Technology.
    16. Erve Sõõru & Heili Hein & Aaro Hazak, 2017. "Why force owls to start work early? The work schedules of R&D employees and sleep," TUT Economic Research Series 25, Department of Finance and Economics, Tallinn University of Technology.

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