Innovation and investment funding in the post-crisis period : have financing patterns and financial constraints of German firms changed?

This study examines the actual funding behavior of German innovative firms in the pre- and post-crisis period. Specifically, we investigate if and how the funding patterns and financial constraints of German small and medium enterprises (SME) changed during and since the financial crisis. The purpose of our analysis is to assess whether the aims of the European CMU action plan, funding innovation and investment activities, complements the behavior of German SMEs. We find fairly stable funding patterns over the years and there is no indication that financial constraints have become tighter in the post-crisis period. Consequently, realizing the CMU’s central goal of broadening the funding mix could leave the funding behavior of German SMEs largely unaffected.