Title: Financing technology: an assessment of theory and practice

Authors: Pasquale Lucio Scandizzo

Addresses: Department Sefemeq, Faculty of Economics, University of Rome ''Tor Vergata'', Via Columbia, 2, 00133 Rome, Italy

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 centre capable of providing imaginative solutions and on the Arab countries as a case study of developing economies facing financial and institutional constraints.

Keywords: innovation; finance; economic growth; new economy; risk evaluation; credit supply; Arab countries; government policies; science parks; technology parks; technology financing; technology ventures; USA; United States; developing countries; technology management.

DOI: 10.1504/IJTM.2005.006816

International Journal of Technology Management, 2005 Vol.32 No.1/2, pp.1 - 33

Published online: 15 Apr 2005 *

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