Capital structure in new technology-based firms: Evidence from the Irish software sector

Hogan, Teresa; Hutson, Elaine

doi:10.1016/j.gfj.2004.12.001

Cited by 99 publications

(86 citation statements)

References 36 publications

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“…In a large sample of COMPUSTAT firms, Giambona et al (2014) find a significant positive relation between tangibility and leverage in general, and the relation is strongest for real estate collateral. International evidence from Hyytinen and Pajarinen (2005) find lower leverage in Finnish ICT firms than comparable small firms, a difference linked to their R&D activity, while Hogan and Hutson (2005) find that new technology-based Irish firms rarely use outside debt. Katz and Murphy (1992) argue that rising demand for educated workers is a driving force on wage structure.…”

Section: Related Literaturementioning

confidence: 98%

Mortgage Finance and Technological Change

Döttling

Perotti

2015

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe explore how house prices evolve under technological progress, when housing serves for consumption as well as store of value. Technological change leads to human capital substituting physical capital and manual labor. Reduced use of physical capital implies that firms have less tangible collateral to pledge for external finance. This results in lower business demand for credit and a decline in interest rates. Over time, savings are redirected to mortgage credit, where houses serve as collateral. Under fixed land supply, house prices rise in real terms. The combination of growing wage inequality and mortgage credit leads to high household leverage for low-skill workers, increasing default rates and foreclosures. Restraining mortgage borrowing is more effective than subsidies to limit mortgage defaults, by containing both leverage and house price appreciation. It also leads to lower interest rates, supporting more corporate investment and higher wages.

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Section: Related Literaturementioning

confidence: 98%

Mortgage Finance and Technological Change

Döttling

Perotti

2015

SSRN Journal

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“…Moreover, they find that venture capital is the most important source of external equity for firms with the highest R&D intensities, while business angels are the major external source of equity for SMEs with 'some but low' innovative activity. Finally, Hogan and Hutson (2005) conclude in a study of Irish software companies that the entrepreneurs in their sample were willing to forfeit independence and control in order to pursue innovation and maximise the value of their companies-eventually, for the potential future sale of their businesses.…”

Section: Article In Pressmentioning

confidence: 98%

The problem of private under-investment in innovation: A policy mind map

Peneder

2008

Technovation

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This paper reviews the major finance-related causes of private under-investment in innovation and the consequent alternative choices for public policy. The focus is on (i) incentive-based arguments that address the problem of limited appropriability of new knowledge, and (ii) the lacking access to external sources of finance caused by imperfections in the capital market. Drawing a policy mind map, which aims to enhance the mutual awareness and coordination of policy makers at the crossroads of technology and corporate finance, the paper is organised along the following chain of thought: (i) causes and rationales, (ii) aims and targets, (iii) critical constraints, and (iv) the main finance-related instruments of innovation policy. r

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“…TBCs need financial capital for innovation, which is achieved through financial networks, another construct object of this study. Other entrepreneurs who want to be co-partners of a TBC (Hogan & Hutson, 2005;Manigart & Struyf, 1997) can own this capital for innovation. However, it is unlikely that TBCs will always have resources from a co-partner for technology investments.…”

Section: Hypothesesmentioning

confidence: 99%

The role of networks in technological capability: a technology-based companies perspective

et al. 2018

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This study examined the influence of networks on the development of technological capabilities of 90 technology-based companies (TBCs) graduated by Brazilian incubators. The relational-based view theoretically supported the study. The data were processed via Structural Equation Modeling (SEM). A model with three hypotheses was tested. Two hypotheses were validated, proving that technological and financial networks built by those firms with external agents explained 70.6% of their capacity to innovate. The insertion into technology networks of licensing, universities, suppliers, and consulting shows that the TBCs are making use of relationships of high technical content, which is expected according to previous literature. As for the financial networks, it was observed that the insertion into networks of venture capital and economic subvention demonstrates that the innovation ecosystem presents advancements in the well-known challenge of financial support for technology-based startups. A third hypothesis was not validated, which provides another important finding: the planning effort presented a negative relationship on the technological capability, but a positive relationship on the insertion into relationship networks. This means that only direct planning is not able to support technological capabilities. In other words, planning is more effective when indirectly applied to relational resources of technical and financial networks, rather than when directly applied to technological capabilities. The insertion into technical and financial networks, in turn, positively affects the TBC's innovation capability. Results demonstrate that this change in planning focus, from inside to outside of the company, could improve technological capabilities in R&D, patent, people, and products. Future studies could investigate the entrepreneur's competencies in managing networks and further understanding of how networks could be constructed through formal and informal cooperation.

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Capital structure in new technology-based firms: Evidence from the Irish software sector

Cited by 99 publications

References 36 publications

Mortgage Finance and Technological Change

Mortgage Finance and Technological Change

The problem of private under-investment in innovation: A policy mind map

The role of networks in technological capability: a technology-based companies perspective

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