Do Innovators Have Access to Finance in the UK ’ s Environmental Sector ?
نویسنده
چکیده
Environmental problems have been on top of government agendas with increasing threats from global warming and its associated implications for the economy and living standards. Technological improvements are seen as the best solution in countering the environmental impacts of economic activity. UK economy is no exception to this, where the environmental sector is put under the spotlight as government has agreed to commit to a new green deal with the aim of maximizing energy efficiency. SMEs in the environmental sector are expected to play an especially important role in meeting the clean technology demands of the economy, yet, the economic and innovative performance of SMEs is very vulnerable in absence of appropriate external financing to support their activity. In an attempt to understand the circumstances surrounding the financing of 330 UK SME firms from the environmental sector between 2007-2010, we focus on the factors that affected firms’ probability to receive external finance (traditional bank loans, venture capital (VC) and government funds). The results indicate that venture capital and government funding are supportive of innovative activities in the environmental sector, yet these funds are accessible to a small minority of firms. The most commonly accessible source of finance, bank loans, on the other hand are not necessarily supportive of the innovative activities in the environmental sector. Our findings also suggest that SMEs of the environmental sector continue to expect to rely on public funding in the face of reductions in Government spending and there may be important negative implications of finance scarcity upon the innovative performance of the clean technology sector.
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