Do credit constraints always impede innovation? Empirical evidence from Vietnamese SMEs

Archer, Lan; Sharma, Parmendra; Su, Jen‐Je

doi:10.1080/00036846.2020.1751049

Cited by 20 publications

(17 citation statements)

References 52 publications

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“…However, from a market-competition perspective, it is argued that the lack of access to financial resources is what encourages corporations to pursue market innovations [ 40 ]. These counter-intuitive events have been observed in developing countries such as China [ 41 ] and Vietnam [ 42 ]. The reason behind this might be the market-competition hypothesis, especially in the Chinese context: world-spotlight economic development energizes investments in innovation.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Financial constraints, government subsidies, and corporate innovation

Wang

Cao

et al. 2021

PLoS ONE

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To investigate the relationships between financial constraints, government subsidies, and corporate innovation, a semi-logarithmic fixed-effect panel model and mediation effect test were applied, based on the data of Chinese listed companies from 2007 to 2017. We find that (1) financial constraints suppress corporate innovation. (2) Government subsidies are targeted at bailing out firms facing financial constraints. (3) Government subsidies promote corporate innovation (4) Government subsidies partially offset the suppression of financial constraints on innovation. We contribute to the fields of public finance, corporate finance, and corporate innovation by: (1) justifying the government subsidies target strategy as a bailout of corporate financial constraints, (2) verifying the corporate-innovation promotion of government subsidies, thus justifying the efficiency of government subsidies, and (3) showing that different types of innovation benefit differently from subsidies, thus justifying subsidies as a structural innovation engine.

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Section: Literature Review and Hypothesesmentioning

confidence: 99%

Financial constraints, government subsidies, and corporate innovation

Wang

Cao

et al. 2021

PLoS ONE

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“…Finally, it will reduce the credit resources to non-urban investment enterprises. Notably, existing literature argues that a reduction in credit resources will reduce corporate R&D investment [17][18][19][20]. Specifically, in China, where the financial system is underdeveloped, bank loans are the PLOS ONE most important external financing method for corporates to obtain funds for innovative activities.…”

Section: Theoretical Hypothesismentioning

confidence: 99%

“…In this study, we explored three channels by which LGD affects corporate R&D investment. That is, (1) the LGD will consume the regional fiscal resources available to enterprises, which would reduce corporate R&D investment [11,12]; (2) the LGD will strengthen the local government collection efforts on the corporation, which would reduce corporate R&D investment [13][14][15][16]; and (3) the LGD will consume regional credit resources available to enterprises, which would reduce corporate R&D investment [17][18][19][20].…”

Section: Introductionmentioning

confidence: 99%

Crowding in or crowding out? How local government debt influences corporate innovation for China

Feng

et al. 2021

PLoS ONE

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The pressure upon local governments to redeem their debt could affect government fiscal ability. It could consequently affect their fiscal policies on corporations, which might distort corporate innovation. Based on the data of Chinese Shanghai and Shenzhen A-share listed companies and the local government implicit short-term debt financed by local government financing vehicles (LGFVs) in 31 provinces, this paper shows that local government debt (LGD) negatively affects corporate R&D investment in China, thereby suggesting a strong crowding-out effect. The crowding-out effect is more pronounced when the firm is a non-state-owned enterprise (NSOE), the firm’s size is small, the firm’s age is young, or the firm is in the lower market competition. This paper provide evidence by interacting the terms that local government actions, such as consumption of fiscal resources, strengthening tax collection efforts, or consumption of credit resources, might partially account for the crowding-out effect. This study illustrates the innovation costs of local government debt.

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“…Model (19) is a fuzzy multiplier linear programming and cannot be solved by standard linear programming solvers because of the fuzzy numbers. Four categories of approaches to solve fuzzy DEA are (1) the tolerance technique, (2) the α-cut technique, (3) the fuzzy ranking technique, and (4) the possibility technique. The α-cut technique is more commonly used to solve fuzzy DEA model [40; 51].…”

Section: ̅̅̅̅̅̅̅ ́ ̃ ̃mentioning

confidence: 99%

“…Banking system is the pillar of the economy in most countries and has a significant role in developing the economic and financial systems by mobilizing small deposits of people in the household sector and directing them towards productive uses in the industrial sectors. For example, growth and development of the banking industry and financial markets pave the way for many organizations to be more innovative by receiving sufficient finance from the banking sector and improving the operational efficiency [1]. Therefore, evaluating the performance of the banking system helps to achieve higher economic growth [2].…”

Section: Introductionmentioning

confidence: 99%

Fuzzy clustering of homogeneous decision making units with common weights in data envelopment analysis

Kazemi

Mavi

Emrouznejad

et al. 2021

IFS

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Data Envelopment Analysis (DEA) is the most popular mathematical approach to assess efficiency of decision-making units (DMUs). In complex organizations, DMUs face a heterogeneous condition regarding environmental factors which affect their efficiencies. When there are a large number of objects, non-homogeneity of DMUs significantly influences their efficiency scores that leads to unfair ranking of DMUs. The aim of this study is to deal with non-homogeneous DMUs by implementing a clustering technique for further efficiency analysis. This paper proposes a common set of weights (CSW) model with ideal point method to develop an identical weight vector for all DMUs. This study proposes a framework to measuring efficiency of complex organizations, such as banks, that have several operational styles or various objectives. The proposed framework helps managers and decision makers (1) to identify environmental components influencing the efficiency of DMUs, (2) to use a fuzzy equivalence relation approach proposed here to cluster the DMUs to homogenized groups, (3) to produce a common set of weights (CSWs) for all DMUs with the model developed here that considers fuzzy data within each cluster, and finally (4) to calculate the efficiency score and overall ranking of DMUs within each cluster.

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Do credit constraints always impede innovation? Empirical evidence from Vietnamese SMEs

Cited by 20 publications

References 52 publications

Financial constraints, government subsidies, and corporate innovation

Financial constraints, government subsidies, and corporate innovation

Crowding in or crowding out? How local government debt influences corporate innovation for China

Fuzzy clustering of homogeneous decision making units with common weights in data envelopment analysis

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