Financial needs for a competitive business model in the knowledge society

This paper investigates the constraints for companies to innovate in order to be competitive in the knowledge society. Using a large and original data set of Catalan firms, the authors have conducted a micro econometric analysis following Henry et al.'s (1999) investment model and von Kalckreuth (2004) methodology empirically contrasting the relationship between firms' investment spread over time and their financial structure. Results show that it exits a positive and significant relationship between firms' investment shift and financial structure, emerging financial constraints for more innovative firms. Furthermore, these constraints are higher for micro companies and firms within the knowledge-advanced services' industry. Finally, the authors find that advanced ICT uses by more innovative firms allow them to reduce constraints of access to sources of finance.