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Financing Innovative Small and Medium-Sized Enterprises in Canada
Working Paper
Shunji Wang, Small Business Tourism Branch, Industry Canada
October 2009
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Table of Contents
II. Literature Review
III. Data
IV. Results and Analysis
V. Multivariate Analysis
VI. Summary and Conclusions
References
Appendix
Acknowledgements
The assistance of many people was invaluable to the production of this research paper. My thanks go to Allan Riding from Telfer School of Management at the University of Ottawa for his comments on the multivariate analysis. Special thanks go to Denis Martel and Richard Archambault from Industry Canada for their feedback and suggestions.
Abstract
This paper examines whether the financing activities and experiences of innovative small and medium-sized (SMEs) in accessing financing are different from those of non-innovative SMEs. This paper also examines whether innovative SMEs face different financing terms and conditions than non-innovative SMEs seeking financing. After controlling for firm category, size, age of the owner and industry sector using logistic and linear regression models, results show that innovative SMEs had greater financing needs than non-innovative ones but were less successful in obtaining the financing requested. The results also show that innovative SMEs face more constraining financing terms and conditions than non-innovative SMEs. In general, innovative SMEs paid higher interest rates and got shorter loan terms.
