Access to finance: innovative firms’ perceptions in post-transition EU members

Abstract

The remainder of this paper is organized as follows. Section 1 provides basic information on theoretical framework and empirical strategy used in the analytical segment. Section 2 gives overview of the problem analysed. Section 3 presents results of the empirical estimation and provides discussion. Last section summarizes conclusions. Theoretical Background and Empirical StrategyThe main focus of the paper is related to the factors infl uencing the access to fi nance perceptions. In particular, we want to address the issue whether access to fi nance is different for innovators than for non-innovators, based on their revealed perceptions. Lack of appropriate fi nancing is important issue from the perspective of innovators but also relevant for all enterprises (Savignac, 2008; Tiwari et al., 2007), regardless of their current innovation effort. The growth of fi rms, especially small ones, is frequently seriously limited by internal fi nances (Carpenter & Petersen, 2002). The literature usually fi nds that small enterprises and in particular micro enterprises have more diffi culties in fi nancing their projects (Beck & Demirgüç-Kunt, 2006). Freel (2007) provides evidence that small and innovative fi rms are less successful in obtaining loans in comparison to large fi rms, and the background for this is found in bank concentration (Beck, Demirgüç-Kunt, & Maksimovic, 2004). Financing related problems negatively affect profi tability of startups (Banerjee, 2014). Nevertheless, literature argues that fi nancial constrains to SMEs in developing countries can be alleviated by fi nancial liberalisation (Laeven, 2003). Since fi nancial sector has been underdeveloped at the beginning of transition and recently severely affected by global economic crisis, the legitimate question is how the fi rms in these economies have weathered these unfavourable conditions. Special characteristics of fi rms have also been analysed in the literature with respect to relative access to fi nance diffi culties. Extant literature suggests that gender of fi rm owner or manager determines relative access to fi nance. Female led fi rms experience more problems in obtaining necessary fi nancing (Lee, Sameen, & Cowling, 2015). However, Haines, Orser and Riding (1999) argue that there is no a priori discrimination against female entrepreneurs, but rather that female entrepreneurs are likely to run smaller businesses in risky industries. Furthermore, low proportion of venture capital investment in female owned enterprises can be explained by the dissimilarity in the industry preferences by female entrepreneurs and venture capitalists (Green et al., 2001). However, although it is still at the low level, these authors identifi ed positive trends regarding venture capital investments of female owned enterprises. Also, over time, access of female entrepreneurs to bank loans has improved (Haynes & Haynes, 1999).Another factor infl uencing the relative access to fi nance is education of the entrepreneurs and/ or employees. It has even been found that educ...

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