This paper investigates how financial constraints affect a firm's decision on whether to conduct product innovation. Theoretically, we show that a firm's optimal decision on product innovation is a function of its past decision, financial constraints and a set of control variables. Through...

This paper explores the inter-connection between domestic firms' product innovation, export, and the presence of FDI. We first set up a theoretical model, where heterogeneous firms, in a monopolistically competitive market, first make decision on product innovation, and then set prices for their...

Accessing external finance for innovation is notoriously difficult. We study the effect of financial constraints on the probability of conducting process innovation, while also considering the role of past innovating experience. Theoretically, we show a firm’s optimal process innovation...