Internal and external financing of innovation: Sectoral differences in a longitudinal study of European firms

Nylund, PA; Arimany-Serrat, N; Ferras-Hernandez, X; Viardot, E; Boateng, H; Brem, A

Internal and external financing of innovation: Sectoral differences in a longitudinal study of European firms

Nylund, PA Arimany-Serrat, N Ferras-Hernandez, X Viardot, E Boateng, H

Brem, A

Permalink

Publisher:: Emerald
Publication Type:: Journal Article
Citation:: European Journal of Innovation Management, 2019, 23, (2), pp. 200-213
Issue Date:: 2019-04-25

Closed Access

	Filename	Description	Size
	10-1108_EJIM-09-2018-0207.pdf	Published version	324.85 kB	Adobe PDF	View/Open

Copyright Clearance Process

Recently Added
In Progress
Closed Access

This item is closed access and not available.

Full metadata record

Field	Value	Language
dc.contributor.author	Nylund, PA
dc.contributor.author	Arimany-Serrat, N
dc.contributor.author	Ferras-Hernandez, X
dc.contributor.author	Viardot, E
dc.contributor.author	Boateng, H https://orcid.org/0000-0002-7949-5557
dc.contributor.author	Brem, A
dc.date.accessioned	2020-06-05T08:27:19Z
dc.date.available	2020-06-05T08:27:19Z
dc.date.issued	2019-04-25
dc.identifier.citation	European Journal of Innovation Management, 2019, 23, (2), pp. 200-213
dc.identifier.issn	1460-1060
dc.identifier.uri	http://hdl.handle.net/10453/141140
dc.description.abstract	© 2019, Emerald Publishing Limited. Purpose: Successful innovation requires a significant financial commitment. Therefore, the purpose of this paper is to investigate the relation between internal and external financing and the degree of innovation in European firms. Design/methodology/approach: An empirical investigation is carried out using a longitudinal data set including 146 large, quoted, European firms over ten years, resulting in 1,460 firm years. Findings: The authors find that only firms in the energy sector will be more innovative when they are profitable. For the sectors of basic materials, manufacture and construction, services, financial and property services, and technology and telecommunications, profitability is negatively related to innovation. External financing in the form of debt reduces the focus on innovation in profitable firms. Research limitations/implications: The authors analyze the findings through the lens of evolutionary economics. The model is not valid for firms in the consumer-goods sector, which indicates a need for adapting the model to each sector. We conclude that the impact of profitability on innovation varies across sectors, with debt financing as a moderating factor. Originality/value: To the best of authors’ knowledge, this is the first study that analyzes the internal and external financing and the degree of innovation in European firms on a longitudinal basis.
dc.language	en
dc.publisher	Emerald
dc.relation.ispartof	European Journal of Innovation Management
dc.relation.isbasedon	10.1108/EJIM-09-2018-0207
dc.rights	info:eu-repo/semantics/restrictedAccess
dc.subject	1503 Business and Management, 1505 Marketing
dc.subject.classification	Business & Management
dc.title	Internal and external financing of innovation: Sectoral differences in a longitudinal study of European firms
dc.type	Journal Article
utslib.citation.volume	23
utslib.for	1503 Business and Management
utslib.for	1505 Marketing
pubs.organisational-group	/University of Technology Sydney/Faculty of Arts and Social Sciences
pubs.organisational-group	/University of Technology Sydney/Faculty of Arts and Social Sciences/IKM and Digital Studies Program
pubs.organisational-group	/University of Technology Sydney
utslib.copyright.status	closed_access	*
pubs.consider-herdc	false
dc.date.updated	2020-06-05T08:27:15Z
pubs.issue	2
pubs.publication-status	Published
pubs.volume	23
utslib.start-page	200
utslib.citation.issue	2

Abstract:

© 2019, Emerald Publishing Limited. Purpose: Successful innovation requires a significant financial commitment. Therefore, the purpose of this paper is to investigate the relation between internal and external financing and the degree of innovation in European firms. Design/methodology/approach: An empirical investigation is carried out using a longitudinal data set including 146 large, quoted, European firms over ten years, resulting in 1,460 firm years. Findings: The authors find that only firms in the energy sector will be more innovative when they are profitable. For the sectors of basic materials, manufacture and construction, services, financial and property services, and technology and telecommunications, profitability is negatively related to innovation. External financing in the form of debt reduces the focus on innovation in profitable firms. Research limitations/implications: The authors analyze the findings through the lens of evolutionary economics. The model is not valid for firms in the consumer-goods sector, which indicates a need for adapting the model to each sector. We conclude that the impact of profitability on innovation varies across sectors, with debt financing as a moderating factor. Originality/value: To the best of authors’ knowledge, this is the first study that analyzes the internal and external financing and the degree of innovation in European firms on a longitudinal basis.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/141140