Relationship with banks and access to credit for innovation and internationalization in SMEs

This paper aims to detect the role of relationship lending in explaining contemporaneously firm’s innovation activity, its probability to export (i.e. the extensive margin) and its share of exports on total sales conditional on exporting (i.e. the intensive margin). We use detailed information on a large sample of Italian Smes during the period 2004-2006 and focus on bank financing. We find that the strength of the bank-firm relation has a positive impact both on the decision to export and on the intensity of exports. Furthermore, our measure of informational tightness significantly affects the probability that the firm introduces both process and product innovation, in line with the results of Herrera and Minetti (2007), and that product innovation has a positive effect on either the extensive and the intensive margin of export.