New Perspectives on the Financing of R&D and Innovation

The overall objective of the dissertation is to open new perspectives on the financing of R&D and innovation. In particular, this thesis examines the role of external debt finance for funding investments in R&D in the bank-based continental European country Belgium and how this relates to the receipt of public support. Previous literature has largely focused on investigating the extent to which R&D performing companies rely on their internal financial resources and the effectiveness of various types of public support programs such as the assignment of R&D subsidies or tax credits. However, academic research on the use of external debt finance for R&D and innovation remains scarce. The aim of this dissertation is to contribute to this underexplored research area. More specifically, the thesis starts with an analysis on what types of companies actually make use of debt finance for their internal R&D activities. Next, the real impact of the 2008-2009 financial crisis on R&D activities at the firm level is examined, an occurrence that was characterized by severe credit tightening. The last part of the dissertation investigates the link between the receipt of selective public support for R&D and the access to bank financing. In particular, the impact of an R&D grant receipt stemming from a reputable government agency on an R&D performing company’s cost of debt is examined.