Entrepreneurial Finance and Innovation: Informal Debt as an Empirical Case
Wu,Jie1; Steven,Si2,3; Wu,Xiaobo2
Source PublicationStrategic Entrepreneurship Journal
ISSN1932443X 19324391
AbstractResearch Summary: Drawing on entrepreneurial finance theory, we examine the trade-offs among different sources of capital for entrepreneurial firms in emerging economies and their impact on innovation. In emerging economies, one of the unique aspects of firm financing is the presence of informal capital, as many formal sources of capital for new entrepreneurs have more constrained access than is the case in mature economies. We suspect that informal debt has an important effect on innovation, and this effect is contingent on the accessibility of formal debt and institutional development. The hypotheses are tested using survey data from 3,235 entrepreneurs in an emerging economy, China. Managerial Summary: This study demonstrates an inverted U-shaped relationship between the level of informal debt and entrepreneurial ventures’ innovation performance. The value of informal debt for promoting innovation was found to be weaker for firms having little or no access to often less expensive institutional finance, whereas a better-developed institutional environment strengthens the effects of informal debt. Copyright © 2016 Strategic Management Society.
Keywordemerging markets entrepreneurial finance informal debt innovation institutional development
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Cited Times [WOS]:10   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionUniversity of Macau
Corresponding AuthorSteven,Si
Affiliation1.University of Macau,College of Business,,Macau,Macao
2.Zhejiang University,School of Management,,Hangzhou,China
3.Bloomsburg University of Pennsylvania,College of Business,,Bloomsburg,United States
First Author AffilicationUniversity of Macau
Recommended Citation
GB/T 7714
Wu,Jie,Steven,Si,Wu,Xiaobo. Entrepreneurial Finance and Innovation: Informal Debt as an Empirical Case[J]. Strategic Entrepreneurship Journal,2016,10(3):257-273.
APA Wu,Jie,Steven,Si,&Wu,Xiaobo.(2016).Entrepreneurial Finance and Innovation: Informal Debt as an Empirical Case.Strategic Entrepreneurship Journal,10(3),257-273.
MLA Wu,Jie,et al."Entrepreneurial Finance and Innovation: Informal Debt as an Empirical Case".Strategic Entrepreneurship Journal 10.3(2016):257-273.
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