Because of its importance in explaining growth, the topic of innovation has received a huge attention in the economic literature. The present study aims at contributing to analyse the determinants of innovation, with a special focus on firm risk. Employing a rich sample of Italian manufacturing firms, we tested for the impact on innovation of the riskiness of the firm, as proxied by the probability of default. We found that riskiness of enterprise reduces the tendency to innovate for the firms. The main channel through which firm risk affects innovation capability appears to be that of innovation financing.
The determinants of innovation: what is the role of risk? / Murro, Pierluigi. - In: MANCHESTER SCHOOL. - ISSN 1463-6786. - 81:3(2013), pp. 293-323. [10.1111/j.1467-9957.2012.02286.x]
The determinants of innovation: what is the role of risk?
PIERLUIGI MURRO
2013
Abstract
Because of its importance in explaining growth, the topic of innovation has received a huge attention in the economic literature. The present study aims at contributing to analyse the determinants of innovation, with a special focus on firm risk. Employing a rich sample of Italian manufacturing firms, we tested for the impact on innovation of the riskiness of the firm, as proxied by the probability of default. We found that riskiness of enterprise reduces the tendency to innovate for the firms. The main channel through which firm risk affects innovation capability appears to be that of innovation financing.
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