Research and development is a crucial activity in the innovation process. Not every firm is in a position to overcome constraints to R&D, such as costs. Those that perform R&D must choose between forming a partnership with other firms, governmental organisations, universities or doing it...

Using direct information on financial constraints from questionnaires, rather than the commonly used balance sheet information, this paper presents evidence that, controlling for traditional factors as size, market share, cooperative arrangement, and expected profitability, financial constraints...