Viral Acharya, Zhaoxia Xu Financial Dependence and Innovation: The Case of Public versus Private Firms (01 Jan 2014) Available at ECGI: http://ecgi.global/working-paper/financial-dependence-and-innovation-case-public-versus-private-firms
This paper examines the relationship between innovation and firms? dependence on
external capital by analyzing the innovation activities of privately-held and publicly-traded firms.
We find that public firms in external finance dependent industries generate patents of higher quantity, quality, and novelty compared to their private counterparts, while public firms in internal finance dependent industries do not have a significantly better innovation profile than matched private firms. The results are robust to various empirical strategies that address selection bias. The findings suggest that public listing is beneficial to the innovation of firms in industries with a greater need for external capital.
This paper considers cost-reducing R&D investment with spillovers in a Cournot
oligopoly with overlapping ownership. We show that overlapping ownership leads
to internalization of rivals’ profits by firms and find that, for...Read more
For the last decade economists have been preoccupied with the decline in bank financing to small businesses and entrepreneurs. This effort has produced a better understanding of the obstacles to external financing. We examine the market and ...Read more
‘Crowdfunding’ — raising capital through large numbers of small contributions — is a burgeoning phenomenon, spurred by the internet’s capacity to reduce communication costs. Its still-evolving status is reflected in diversity of contracting...Read more