Financing Technology: An Assessment of Theory and Practice

50 Pages Posted: 16 Jan 2004

Date Written: January 2004

Abstract

Financing technology poses a special challenge to economic institutions for several reasons. First, the uncertainty surrounding all the investment decisions is particularly acute and pervasive in the case of R&D, as well as developing and testing process and product innovation. Second, while the banks appear to have an important role to play, for many types of innovative businesses, they cannot be the sole source of financing. Third, technology ventures appear to face a basic trade off between profit and growth, which may be exacerbated by a difficult relationship with a credit institution. The paper examines these questions both theoretically and empirically, focusing on the US market as the leading financial center capable of providing imaginative solutions and on the Arab countries as a case study of developing economies facing a financial and institutional constraints.

Keywords: Innovation, finance; growth, new economy, risk evaluation, credit supply, Arab countries, government policies, science and technology parks

Suggested Citation

Scandizzo, Pasquale Lucio, Financing Technology: An Assessment of Theory and Practice (January 2004). Available at SSRN: https://ssrn.com/abstract=486823 or http://dx.doi.org/10.2139/ssrn.486823

Pasquale Lucio Scandizzo (Contact Author)

University of Rome ( email )

Via Columbia, 2
Rome, I-00133
Italy
+3906/72595929 (Phone)
+3906/2040219 (Fax)

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