Financing of growth companies in Finland (Etlatieto Oy)
Research group: Business renewal Research began: 2020 Research ends: 2021 Sponsored by: Prime Minister's Office (VN TEAS funding)

Responsible for research:

Financing of growth companies in Finland (Etlatieto Oy)

Financing of growth companies in Finland (Etlatieto Oy)

The purpose of this research project is to evaluate and recognise possibilities to both utilize EU’s financial instruments for the development of Finland’s growth companies financial markets and possibilities to replace business aids with more market-conform solution. The focus is especially in the possibilities of the InvestEU-program as a fill-in for finance constraints for growth companies and growth-oriented companies, and for sustainable growth investments (including infrastructure).

This research project will answer following research questions:

  1. What kind of finance contraints the growth companies face? What kind of finance contraints are in the financing of sustainable growth investments? What types of financing methods (guarantee, loan, equity or other) or alternative subsidies identified market gaps could be fixed or removed?
  2. In what ways do the State aids prevent or promote channeling of the private funding to growth companies and sustainable growth investments?
  3. What kind of meaning do the new market-conform EU financing instruments and public aid have on growth companies and sustainable financing from 2021 onwards? How the financing instruments can replace and complement business grants?
  4. How market-conform InvestEU financing (including domestic supply of services financing instruments) could be utilized more comprehensive way and what does that mean for the State aid?

This project will consist of four phases.

At the first phase research literature of growth companies and their financial constraints will be studied. In addition basic information of EU’s financial instruments and their utilizing in Finland and in various countries will be analyzed.

At the second phase financial constraints of Finnish growth-oriented companies will be analyzed with microeconometric methods and material. After this growth companies’ views of the need for financing and market constraints will be identified as well as their views of the suitability of EU financial instruments for companies’ financing needs.

At the third phase views of different stakeholder representatives about the finance constraints of growth companies and exploitation possibilities of EU financial instruments will be widely identified. Concrete examples and practices from standard countries within to the exploit EU financial instruments will be recognised.

At the fourth and last phase findings of the project will be brought together and based on the results conclusions for the research questions will be made.

In addition survey and advanced interviews will be conducted for the chief operating decision makers of the growth companies as well as expert interviews and stakeholder workshop.

Based on the results of this project policy recommendations of the more varied and efficient use of the InvestEU program, removing finance constraints in growth finance and investment financing, developing enterprise support and increasing functionality and contestability of markets will be presented.

This project is being carried out by Forefront Oy with Etlatieto Oy.

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