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Research paper 8/2015
Publication Date: 
December 2015

This paper investigates the likelihood of firms of different age, size and innovation intensity to seek debt or equity finance. Surveys in Australia and across the OECD suggest that obtaining adequate access to capital is one of the biggest hurdles to growing innovative firms.

Our analysis shows a majority of Australian firms do not tend to seek debt or equity finance in any given year. It finds that most young SMEs are able to obtain the debt finance they seek. The paper also finds that:

  • young innovative firms, particularly the new-to-market innovators, are significantly more likely to seek debt and equity finance than non-innovators
  • young innovative SMEs are also significantly more likely to get the equity finance they seek, suggesting that there is not an issue with equity finance for young innovative SMEs

Authors: Mahmoud Alinejad, Antonio Balaguer and Luke Hendrickson

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