A Framework for Selecting Financing Instruments Based on Knowledge-Based Firms Clustering

Authors

1 Assistant Professor, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran

2 Allame Tabatabaei University

3 Ph.D. Candidate of Technology Management, Allameh Tabataba'i University, Tehran, Iran

Abstract

Today, knowledge-based firms play a significant role in the competitiveness of countries and, therefore, attract the attention of policy makers. One of the biggest challenges of survival and growth in these companies is the suitability of financing. Although different financing instruments are defined for them and various studies have been conducted about these instruments, the major part of these researches are focused on the firm's life cycle. Hence, the variability of instruments on the one hand and differences in the characteristics and performance of the firms on the other hand rise a need to cluster them (firms), based on the factors affecting on the financing, and consequently suggesting the suitable instruments for each cluster. Therefore in this study, financial features have been identified with the help of a questionnaire and their financial statements, also, a cluster analysis has been done with a sample size of 253 Iranian knowledge-based firms. As a result, there is a taxonomy of four types of firms named: New-Comers, Small Manufacturers, Small Service focused firms and Old-timers and suitable financial instruments for each of them are determined. Accordingly, New-Comers have the least choices for financing and Old-timers are faced with a vast range of instruments. Financing for Small Producers and Small Service Providers are different in some cases such as Warehouse Receipts.

Keywords

References

[1] Fakhari, H. (2015). Review of Knowledge-based Firms Definition Consistent with the Economic Conditions of Iran. Journal of Science & Technology Policy, 6(4), 69-88. {In Persian}.
[2] Ghazinoori, S., Sarkissian, A., & Alizadeh, P. (2009). The State and Technological Entrepreneurship. Tehran: Industrial Research and Training Centre of Iran. {In Persian}.
[3] Golalizadeh, M., Tabatabaeian, H., & Zaeferian, R. (2008). Providing a Systemic Solution for Establishing Institutions to finance the Knowledge-based Firms in Iran. Tehran: Pardis Technoloy Park, 46-52. {In Persian}.
[4] OECD. (2013), Policies for Seed and Early Stage Finance.
[5] Aliahmadi , A., & Ghazinoori, S. (2008). Prioritizing Policy Instruments For Supporting New Technology-Based Firms in Iran, Using A Fuzzy MCDM Model. Journal of Science & Technology Policy, 1(3), 73-89. {In Persian}.
[6] Berger, A. N. & Udell, G. F. (1998). The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle. Journal of banking & finance, 22(6), 613-673.
[7] United Nations Economic and Social Commmission for Acia and the Pacific (UNESCAP). (2012). Policy guidebook for sme development in Asia and the Pacific.
[8] De Jong, J. P., & Marsili, O. (2006). The fruit flies of innovations: A taxonomy of innovative small firms. Research policy, 35(2), 213-229.
[9] Cassar, G. (2004). The financing of business start-ups. Journal of Business Venturing, Volume 19, Issue 2, 261-283.
[10] Bozkaya, A., & Van Pottelsberghe De La Potterie, B. (2008). Who funds technology-based small firms? Evidence from Belgium. Economics of Innovation and New Technology, 17(1-2), 97-122.
[11] Cui, Y., Zha, L., & Zhang, F. (2010). Financial support system and strategy of SMEs in the incubation based on business life cycle. International Business Research, 3(4), 119.
[12] Hosseini, M. (2006). Theories, Methods and Concepts of Entrepreneurial Financing: Emphasizing Venture Capital. The Second National Conference on Venture Capital, Iran. {In Persian}.
[13] Estiri, R., & Moshiri, B. (2009). Financing Instruments for Knowledge-based firms. 2nd International Conference on Development of Financing System in Iran. {In Persian}.
[14] Sadrinia, M., Mirasadi, S., & Varvani, M. (2009). Various Methods for Financing Small and Medium Enterprises (sme) in Various Stage of Their Life Cycle. Roshd-E-Fanavari. 19(5), 13-21. {In Persian}.
[15] OECD. (2015). New Approaches to SME and Entrepreneurship Financing: Broadening the Range of Instruments.
[16] OECD. (2009). Financing high growth and innovative start-ups and SMEs: data and measurement issues, OECD, Paris,
COM/STD/CFE/SME(2008)2/FINAL.
[17] Berger, A. N., & Udell, G. F. (2006). A more complete conceptual framework for SME finance. Journal of Banking & Finance, 30(11), 2945-2966.
[18] USAID. (2009). Enabling Small and Medium-Sized Enterprise Access to Finance, FS Series N. 4, USAID Financial Sector Knowledge SharingVenture Capital Have Failed – and What to do About It, Princeton: Princeton University Press.
[19] SEC. (2013). What Are Corporate Bonds? Investor Bulletin, US Securities Exchange Commission, Office of Investor Education and Advocacy.
[20] Tehran Chamber of Commerce Industries Mines and Agriculture. (2015). Small and Medium Enterprises Financing. {In Persian}.
[21] Allianz Global Investors. (2015). Understanding convertible bonds.
[22] http://www.insuranceandbenefits.com/life/participating-loans-variable-loans-index-loans.aspx. Last access at 1/30/2016.
[23] Robinson, A. D., Fert, I., Webb, D. N., Thacher, S., & Bartlett, L. L. P. (2013). Mezzanine Finance: Overview. Simpson Thacher & Bartlett LLP. Last modified.
[24] Suisse, C. (2006). Mezzanine Finance–Mischform mit Zukunft. Economic Briefing, (42).
[25] Rizzoni, A. (1991). Technological innovation and small firms: a taxonomy. International Small Business Journal, 9(3), 31-42.
[26] Koberg, C. S., Sarason, Y., & Rosse, J. (1996). A taxonomic approach to studying high-technology firms: Deciphering the Tower of Babel. The Journal of High Technology Management Research, 7(1), 15-34.
[27] Evangelista, R. (2000). Sectoral patterns of technological change in services. Economics of innovation and new technology, 9(3), 183-222.
[28] Archibugi, D., Cesaratto, S., & Sirilli, G. (1991). Sources of innovative activities and industrial organization in Italy. Research policy, 20(4), 299-313.
[29] De Marchi, M., Napolitano, G., & Taccini, P. (1996). Testing a model of technological trajectories. Research Policy, 25(1), 13-23.
[30] Hatzichronoglou, T. (1997). Revision of the high-technology sector and product classification. OECD STI Working Paper Series No. 1997/2, Paris.
[31] Committee on assessment and qualification of Knowledge-based firms and institutes. (2014). Legal documents and regulations related to the assessment, recognition of qualifications and Supporting Knowledge-based firms and institutes. {In Persian}.
[32] Pavitt, K. (1984). Sectoral patterns of technical change: towards a taxonomy and a theory. Research policy, 13(6), 343-373.
[33] Peneder, M. (2002). Intangible investment and human resources. Journal of Evolutionary Economics, 12(1), 107-134.
[34] Pirnay, F., & Surlemont, B. (2003). Toward a typology of university spin-offs.Small Business Economics, 21(4), 355-369.
[35] World Intellectual Property Organization (WIPO). (2016). Importance of IP for smes.
[36] Tehran Stock Exchange Official Website. (2015). Guide to Tehran Stock exchange. {In Persian}.
[37] Iran Fara Bource Official Website. (2015). Instructions for accepting, supplying and transferring securities in Iran Fara Bource. {In Persian}.
[38] Momeni, M. (2011). Data Clustering (Cluster Analysis). Tehran. {In Persian}.
[39] Milligan, G. W., & Cooper, M. C. (1987). Methodology review: Clustering methods. Applied psychological measurement, 11(4), 329-354.
 
 
 
Journal of Science and Technology Policy
Volume 10, Issue 2
July 2017
Pages 13-30

Files

Share

How to cite

Statistics