Financing of technology-intensive small businesses: some evidence on the uniqueness of the ICT sector [An article from: Information Economics and Policy]

This digital document is a journal article from Information Economics and Policy, published by Elsevier in 2005. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
While information and communications technology (ICT) firms are typically subject to the same market forces as other firms, there are some forces, such as network effects, that may be particularly important in determining their financing patterns. We conjecture and provide supporting evidence that these forces increase the equity-dependence of the ICT firms. Using a recently collected small business data from Finland, we find, in particular, that the leverage ratio of ICT firms is more conservative than that of other small businesses. The conservative debt ratios can be linked to the ICT firms' R&D-investments.