Author Archives: Margaret Pesuit

I3U research on financing constraints presented at CONCORDi

Financing constraints of innovative firmsAt the CONCORDi 6th European conference on corporate R&D and innovation, held in Seville on 27-29 September 2017, Anabela Santos and Michele Cincera of ULB presented their I3U-funded research on “Financing constraints and growth ambitions of innovative European firms”.

Their research focuses on identifying which internal and external factors can hinder access to finance and on assessing how far innovative behaviour can induce financing constraints. In the end, they concluded that innovation behaviour has a positive impact on financing constraints. For example, innovative firms compared to non-innovative ones have a 29-34 percent higher probability of perceiving access to finance as an extremely pressing problem. In addition, innovative and non-innovative firms have similar obstacles in accessing external finance.

To resolve some of these constraints and to improve firm growth, the researchers had two main policy recommendations. First, as a complement to direct or indirect support for R&D and innovation, innovative companies need financial support for daily activities. Second, making venture capital operations easier and providing access to credit lines and guarantees for loans could complement direct and indirect support to reduce the financing pressure on innovative firms in Europe.

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ULB presents their I3U research on innovation financing in Rome, Luxembourg and Évora

ULB presentation Spring Innovation 2018

ULB presentation Spring Innovation 2018Anabela Santos and Michele Cincera of ULB, along with Giovanni Cerulli of the National Research Council of Italy, recently presented their paper titled, “Assessing the additionality of innovation financing on firms’ growth dynamics: New evidence from European firms” at the RNI (Research Network on Innovation) conference on Financing Innovation in a Turbulent World: Actors, Logics, Tools, held in Rome, Italy on 23 March 2018 and in an economic seminar at the National Institute of Statistics and Economic Studies of the Grand Duchy of Luxembourg (STATEC) on 29 May 2018.

The study was also presented at the 2nd UMPP Master and Doctoral Consortium for Research on Public Policy at the Universidade de Évora in Évora, Portugal, on 14-15 June 2018, under a slightly modified name: “Assessing Financing, Innovation and Growth Linkage: New Evidence for Policy”. Anabela Santos won the 2018 edition of the prestigious UMPP Young Researchers Award in Public Policy for the paper presented during the event.

The paper explores the effect of eight sources of financing (internal funds, bank loan, credit line, trade credit, grants, equity, leasing and factoring) on innovation and on firm growth. The conceptual framework is based on the assumption that using or obtaining access to finance in a given year gives the firm a better environment for introducing one or more innovations in the following year. In this way, firms can grow through innovation.

Globally, the results show a significant positive effect of external sources of financing on innovation. However, not all external sources of financing have the same effect on innovation behavior. In addition, firms that used internal funds for their business development do not appear to be more innovative than those that have not used any type of financing. Firms that issued equity financing, which includes venture capital and business angels, in the previous year show a positive effect on innovation and the size of the impact is higher compared to other financing instruments. Surprisingly, grants show a more moderate positive effect on innovation than trade credit and factoring.

With regard to innovation additionality on firm growth, measured by turnover, the highest impact occurs with firms that have issued equity financing. Grants, credit lines, bank loans and leasing also showed significant additionality on turnover growth, but the size of these effects is more modest compared to equity financing. Concerning employment growth, the only significant positive values are found for bank loans, credit lines, grants and leasing. Equity financing seems to have no additional effect on employment levels.

Because firms can use each source of financing individually or with other sources, the effect of using more than one source of financing was also assessed. There was no significant difference between using one source of financing or none at all. Using three different sources of financing appears to be the best combination to boost innovation, while using only two different sources of financing has a significant positive effect on turnover and employment growth.

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I3U analysis and data in article on scientific potential

I3U data and analysis in scientific article

I3U data and analysis in scientific articleBuilding on the dataset and analysis prepared for the I3U report on Open Access to Research Results and Research Information Services, M. Jokić, A. Mervar and S. Mateljan recently published the article “Scientific potential of European fully open access journals” (Scientometrics, 2018, 114 pp. 373-1394, DOI 10.1007/s11192-017-2629-y). Their analysis shows that the scientific potential of European countries, as measured by their publication in peer-review journals as well as open access journals (OAJs), is significant.

The article focuses on European fully open access journals (OAJs) as a potentially optimal channel of communication in science. The authors fully explore OAJs (n=1201) indexed by the Scopus database with several bibliometric indicators such as quartile rankings, the SJR (SCImago Journal Ranking) and the h-index. As the countries they focus on in their analysis have entered the European Union at different times and are contextually diverse, authors divide them into three groups: A (members before 1995), B (became members in the 2004–2013 period) and C (EU candidate countries). In addition, they complement this analysis across country groups with an analysis across four major subject fields: the life, health, physical and social sciences.

Quartile rankings indicate that journals in Q1 dominate in group A, followed by journals in Q2. In the remaining two country groups, journals belonging to Q3 have more than 50% of the share. Analysis using different scientific fields stresses that the life and health sciences have the highest shares of OAJs in Q1. In the physical sciences the highest share of OAJs is in Q3 while combined shares of Q2 and Q3 are above 50%. Only 10% of all European OAJs in the social sciences is in Q1, suggesting that in the social sciences the open access concept is less accepted than in other fields. Furthermore, authors find the least difference between journals in group A and groups B and C in the social sciences, with respect to both coverage and quality indicators. In all scientific fields, the median SJR indicator is, in the case of groups B and C, higher for OAJs than non-OAJs, while the opposite is true for group A.

Read the original abstract or buy the PDF at Scientometrics

I3U Final Conference – September 25, 2018

I3U Final Conference Save the Date

We are pleased to announce the I3U – Investigating the Impact of the Innovation Union Final Conference, which will be held on September 25, 2018 at the Auditorium Nowotny COV2, Place Rogier 16, in Brussels.

This public event will present the project’s results and will look at how successful the Innovation Union has been in encouraging and strengthening innovation and research in Europe. It will feature sessions on getting good ideas to market and how to govern innovation, and will discuss where EU innovation policy is headed.

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 645884.

I3U Project and Scientific Advisory Meeting – April 26-27, 2018

A project and scientific advisory meeting will be held in Warsaw, Poland on April 26-27, 2018 to discuss what has been done so far, along with upcoming deliverables and results. The latest deliverables, which offer a more detailed assessment of the Innovation Union’s commitments, will be published on the site next month.

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