Abstract This study distinguishes entrepreneurs’ cognitive financial constraints from supply and assesses their relative importance to small business growth. Drawing the literature on styles institutional theory, we argue that businesses’ derive not only market failures but also factors of entrepreneurs. Analysing a comprehensive dataset more than 200,000 businesses in Vietnam, show both impede...

The ability of foreign firms to bring in additional capital to a host country together with technological and skill spillovers may relieve domestic firms of their financial constraints. Yet, some foreign firms borrow more from the local capital markets than the amount of capital they bring in, worsening the financial constraints of the domestic firms. We use a panel of 182 Ghanaian manufacturin...

Through the interaction between financial constraints and R&D, I study two assetpricing puzzles: mixed evidence on the financial constraints–return relation and the positive R&D-return relation. Unlike capital investment, R&D is more inflexible. A financially constrained R&D-intensive firm is more likely to suspend/discontinue R&D projects. Therefore, R&D-intensive firms’ risk increases with th...