Small Business Economics

, Volume 28, Issue 1, pp 23–35 | Cite as

Are Small Innovators Credit Rationed?

  • Mark S. FreelEmail author


Drawing upon a sample of 256 small firms who applied for bank loans, the current paper is concerned with the extent to which ‘innovativeness’ is associated with a lower level of loan application success. The paper records the proportion of loan successfully applied for and estimates a series of tobit models utilising a number of proxy measures for innovation (in terms of inputs, outputs, and commercial significance to the firm) and incorporating standard controls. In general, the models suggest (as anticipated) that the most innovative firms are less successful in loan markets than their less innovative peers – though there is some variation by proxy. Moreover, there is tentative evidence that ‘a little innovation may be a good thing’.


Small Firm Product Innovation Bank Loan Innovation Intensity Loan Market 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer 2006

Authors and Affiliations

  1. 1.School of ManagementUniversity of OttowaOttowaCanada

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