A semi-nonparametric extended ordered probit model with selection for financial barrier perception

Abstract

In order to contribute to the literature concerning the difficulties faced by innovative firms in terms of financing, this paper aims to investigate the perception levels of financial barriers according to their innovation intensity and analyzes determinants of financial barriers for a developing country for the most recent years. A semi-nonparametric extended ordered probit model with selection is used to establish the determinants of perception of financial barriers by employing the Business Enterprise and Environment Survey, BEEPS 2013 and BEEPS 2019. According to the findings, when there is an engagement in innovation activities, then firms are more likely to assess financial barriers as important. It is believed that these results have important implications for developing countries.