The paper investigates young firms' choice of capital source. Our theoretical model hypothesizes a positive (negative) relation between riskiness of the project (price of venture capital) and receiving informed equity. We test our predictions by employing a unique data set collected by KfW...

Purpose – The purpose of this paper is to clarify the concept of dynamic capabilities from the knowledge‐based perspective and investigate the mechanisms of dynamic capabilities on innovation performance in networked environments. Design/methodology/approach – This paper designed a...

We find that firms with higher cash-to-assets ratios obtain more patents and patent citations for a given amount of research and development expenditures. We propose that large cash reserves increase managerial incentives to innovate by reducing the risk to their career from undertaking...