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  5. Access to finance and productivity enhancing investments in the UK

Research project

Access to finance and productivity enhancing investments in the UK

  • Start date: 13 January 2020
  • End date: 1 May 2021
  • Funder: Economic and Social Research Council (ESRC)
  • Principal investigator: Dr Sandra Lancheros
  • Co-investigators: Dr Annina Kaltenbrunner
    Dr Effie Kesidou
    Dr Joel Rabinovich
    Postgraduate researchers:
    Dr Joshua Cave
    Chau Chu
    Gladys Huaccha

Description

The project investigates the complex link between firms’ productivity enhancing investments and their relationships to financial markets in the UK. This includes, on the one hand, identifying barriers that prevent UK business to access their preferred sources of finance to fund their investment opportunities. And, on the other hand, evaluating any potential detrimental implications of firms’ increased exposure to financial markets on productivity, for example through shareholder value pressures or providing alternative investment vehicles. Particular emphasis is placed on the different experiences of the UK’s regions in this productivity – finance nexus.

The project is a policy-oriented initiative in collaboration with the West Yorkshire Combined Authority (WYCA) aimed at shaping the allocation of local finance to enhance the prosperity of UK business.

This project is funded by the ESRC – Productivity Insights Network. Project no. 154166.

Productivity Insights Network logo

Research overview

Through the use of extensive econometric analysis and a series of semi-structured interviews with business leaders, the project will:

  1. Identify the sources of finance used by UK business to fund their diverse investment decisions, such as innovation, digitalization, market expansion, etc.
  2. Uncover potential mismatches between the desired source(s) of finance and the actual funding obtained, as well as the potential implications that this might have on firms’ strategy and productivity.
  3. Identify forgone investment opportunities due to the lack of appropriated funding.
  4. Uncover how financial pressures and/or opportunities shaped firms’ productivity enhancing investment decisions
  5. Explore how the uneven financial development across different regions in the UK affects firm’s financial and investments decisions.

Publications and outputs

The results of this evidence-based research project will be disseminated in the first place amongst key economic actors in the Leeds City region, through workshops and meetings with key stakeholders.

 

Project report: Financing productivity in the UK.