Oxford Review of Economic Policy volume 18, issue 1, P35-51 2002 DOI: 10.1093/oxrep/18.1.35 View full text
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B. H. Hall

Abstract: AbstractEvidence on the "funding gap" for R&D is surveyed. The focus is on financial market reasons for underinvestment in R&D that persist even in the absence of externality-induced underinvestment. The conclusions are that 1) small and new innovative firms experience high costs of capital that are only partly mitigated by the presence of venture capital; 2) evidence for high costs of R&D capital for large firms is mixed, although these firms do prefer internal funds for financing these investments; 3) there…

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