Are small innovators credit rationed?

M. Freel

Research output: Contribution to journalArticlepeer-review

165 Citations (Scopus)


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'.
Original languageEnglish
Pages (from-to)23-35
Number of pages12
JournalSmall Business Economics
Issue number1
Publication statusPublished - 2007


  • entrepreneurship
  • innovations
  • small businesses
  • business


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