@article{04f7cbb68c42422cb36f16708c831c88,
title = "Funding innovative SMEs operating in traditional sectors",
abstract = "This study is a continuation of Harel and Kaufmann's research, who investigated the funding difficulties of Innovative SMEs in Traditional Sectors (ISTS) from the supply side. The current study aim is to assess the ISTS funding market-failure argument, from the demand side as well. The findings based on an analysis of case studies show similar reports of lack of funding access, despite the great diversity and variety of the companies in the sample, as manifested in their activities across an array of industrial sectors, their levels of innovation, their present lifecycle stages, and their broad size and age range. The in-depth interviews contribute to an understanding of the market failure from the personal perspective of the company executives, provided a first-ever opportunity to obtain sensitive, seldom-revealed information and data, and afforded the opportunity to shed light from a different perspective on the difficulties ISTS face in obtaining financing for innovation.",
keywords = "SME, funding, innovation, market failure, traditional sectors",
author = "Ronen Harel and Dan Kaufmann",
note = "Funding Information: Binks and Ennew (1996) argue that there is no {\textquoteleft}typical{\textquoteright} SME and that the heterogeneous nature of these companies exacerbates the difficulty of accurately assessing the risks for a given company. It is easier for lenders to assess the financial value of standard securities as compared to the future worth of an innovative SME. Lack of knowledge and experience on the part of small business owners in dealing with formal financial institutions may also lead to unsuccessful interactions when applying for funding from these sources. Small business owners are not necessarily financially savvy; therefore, information asymmetry sometimes stems from miscommunication and inability to present information in an appropriate manner (Tucker and Lean, 2003). Most small businesses are run by their owners, who in most cases and especially in the early years of the business operation, tend to have limited management experience compared to professional executives at larger firms. This lack of professional management is an additional risk factor in the eyes of lenders when evaluating funding requests from small firms (Berger and Udell, 1998). Publisher Copyright: {\textcopyright} 2022 Inderscience Enterprises Ltd.",
year = "2022",
month = jan,
day = "1",
doi = "10.1504/IJESB.2022.122023",
language = "English",
volume = "45",
pages = "314--333",
journal = "International Journal of Entrepreneurship and Small Business",
issn = "1476-1297",
publisher = "Inderscience Enterprises Ltd.",
number = "3",
}
