Finance pathways for young innovative small‐ and medium‐size enterprises: a demand‐side examination of finance gaps and policy implications for the post‐global financial crisis finance escalator

Owen, Robyn ORCID: https://orcid.org/0000-0003-4241-3367, Deakins, David and Savic, Maja (2019) Finance pathways for young innovative small‐ and medium‐size enterprises: a demand‐side examination of finance gaps and policy implications for the post‐global financial crisis finance escalator. Strategic Change, 28 (1) . pp. 19-36. ISSN 1086-1718 [Article] (doi:10.1002/jsc.2243)

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Abstract

The paper addresses the persistent finance gaps facing young, innovative SMEs, by examining the financing pathways of 40 UK businesses in a post global financial crisis (GFC) environment. Using a unique combination of finance escalator and resource-based view theories four propositions are tested by examining: (i) early and growth stage development; (ii) innovation R&D investment horizons; (iii) the management resource base; (iv) finance gaps and their implications. The paper finds that successful financing strategies are emerging, using a mix of bootstrapping, collaboration and new emerging post-GFC finance escalator funding, which is heavily reliant on government interventions. It also pinpoints remaining finance gaps and the need for more cohesive financing and support policy to address these.

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