Does public entrepreneurial financing contribute to territorial servitization in manufacturing and KIBS in the United States?

Abstract

ABSTRACT This study uses territorial innovation theory and research advances on territorial servitization to examine the effect of public financing on firm survival and performance in two critical sectors in the United States. The goal is to inform servitization efforts on the effect of public entrepreneurial financing to support the renaissance of manufacturing and the ever-growing knowledge-intensive business services (KIBS) sector. Results indicate that public start-up and expansion capital, as government loans and guaranteed loans, decrease firm survival in the KIBS sector and firm receipts in both sectors, when compared with private sources of capital. In sensitivity analyses, no effect is observed for government grants.