Heterogeneous effects of financial constraints on innovation: Evidence from Chile
Author
dc.contributor.author
Álvarez Espinoza, Roberto
Author
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Crespi, Gustavo
Admission date
dc.date.accessioned
2015-12-28T18:03:40Z
Available date
dc.date.available
2015-12-28T18:03:40Z
Publication date
dc.date.issued
2015
Cita de ítem
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Science and Public Policy (2015) pp. 1–14
en_US
Identifier
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0302-3427
Identifier
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doi:10.1093/scipol/scu091
Identifier
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https://repositorio.uchile.cl/handle/2250/135996
General note
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Artículo de publicación ISI
en_US
Abstract
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In this paper we study the effect of financial constraints on innovation using data from a 2007 survey of more than 10,000 Chilean firms. In contrast with other surveys, this dataset allows for the construction of a direct indicator of constraints on credit for investment in innovation and sheds light on how these restrictions affect firm's innovation outcomes heterogeneously. In our empirical approach, we deal with several econometric problems associated with the endogeneity of the credit constraint indicator and the binary nature of the innovation variable. We find that financial constraints are quantitatively important barriers for innovation in Chile. These constraints are particularly severe in the case of small firms and firms operating in the service sectors. We also find that these constraints are specific to innovation-related investments and particularly with regard to the accumulation of intangible assets.