FINNOV

The TEMAFIC conference on the Financial Constraints, Firm and Aggregate Dynamics received the financial support of the EU through the Network of Excellence DIME (Dynamics of Institutions and Markets), and through the FP7 Project FINNOV (Finance, Innovation & Growth).

Conference description: While there is a general agreement that today’s financial crisis has lead to a persistent shortage of financial resources and to a general economic slowdown, we still lack a broad and deep understanding of the different microeconomic mechanisms governing the interplay between firms behaviour and financial constraints. Indeed, a good deal of empirical and theoretical studies have shown that financial constraints play an important role in several aspects of firm behaviour, such as firm survival and growth, all the way export and location decisions. On a different albeit related ground, constraints on internal and external financing are likely to be more severe for particular groups of firms. One example is young firms, about which information asymmetries in goods and credit markets can be larger and thereby imply more difficulties in generating cash flows and obtaining external finance. Likewise, for innovative firms, technological uncertainty and lack of collateral make it likely that such firms will rely more on internal sources to finance R&D expenditures. Finally, although credit crunches originating in the financial sector are certainly biting all firms, they are likely to impact first and more acutely on those categories of firms (e.g. small firms) for which monitoring costs are higher.

For further conference information and registration details, please visit the TEMAFIC conference website.