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<p>Successful high-technology industries enhance productivity, competition, and consumer choice. To support their innovating activities, these firms need access to finance. Given the uncertain nature of innovation, along with the high associated cost, many firms turn to equity financing. Using novel survey data for 153 indigenous equity and 141 indigenous non-equity financed high-tech firms, we examine what determines how these firms raise equity finance (i.e., independent and corporate venture capital, business angel, government-sponsored) and non-equity finance (i.e., personal investment, family and friend investment, debt finance). We find that debt finance is negatively associated with equity financing in high-tech firms. Moreover, in our sample of high-tech firms, we find that innovating firms, export-oriented firms operating in niche markets, and firms with high levels of human capital have a greater probability of being equity financed.</p>
</abstract>

Successful high-technology industries enhance productivity, competition, and consumer choice. To support their innovating activities, these firms need access to finance. Given the uncertain nature of innovation, along with the high associated cost, many firms turn to equity financing. Using novel survey data for 153 indigenous equity and 141 indigenous non-equity financed high-tech firms, we examine what determines how these firms raise equity finance (i.e., independent and corporate venture capital, business angel, government-sponsored) and non-equity finance (i.e., personal investment, family and friend investment, debt finance). We find that debt finance is negatively associated with equity financing in high-tech firms. Moreover, in our sample of high-tech firms, we find that innovating firms, export-oriented firms operating in niche markets, and firms with high levels of human capital have a greater probability of being equity financed.

Determinants of equity financing: a demand-side analysis of Irish indigenous technology-based firms

The Irish Journal of Management

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Successful high-technology industries enhance productivity, competition, and consumer choice. To support their innovating activities, these firms need access...

Determinants of equity financing: a demand-side analysis of Irish indigenous technology-based firms

Article Category: Research Article

Publicado en línea: 13 may 2022

Páginas: 52 - 68

DOI: https://doi.org/10.2478/ijm-2022-0002

Palabras clave
Equity finance, non-equity finance, high-tech firms, innovation, probit

© 2022 Jane Power et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Determinants of equity financing: a demand-side analysis of Irish indigenous technology-based firms

Article Category: Research Article

Publicado en línea: 13 may 2022

Páginas: 52 - 68

DOI: https://doi.org/10.2478/ijm-2022-0002

Palabras claveEquity finance, non-equity finance, high-tech firms, innovation, probit

© 2022 Jane Power et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Palabras clave
Equity finance, non-equity finance, high-tech firms, innovation, probit