New technology-based firms (NTBFs) greatly contribute to the dynamic efficiency of the economic system. To perform this role, NTBFs need external financing. However, private financing of this type of firm is particularly subject to market inefficiencies. This seems to recommend policy...

The present work analyses the effect of public finance on firm investments in a longitudinal sample of 293 Italian unlisted owner-managed, new technology-based firms (NTBFs), observed over a 10-year period from 1994 to 2003. We find that large, old NTBFs and those located in the north of Italy...