Access to banks and external capital acquisition: perceived innovation obstacles

We examine whether low access to banks is perceived as problematic when obtaining financial capital for innovation activities. Data on innovation obstacles from the Swedish Community Innovation Survey are combined with geo-coded data at the firm level, which allows us to proxy access to external capital by the Euclidian distance from each firm to its nearest bank and the supply within a radius of 5 km. The results indicate that both a longer distance to the nearest bank and fewer banks in the vicinity are related to experiencing greater difficulties in obtaining external financial capital for innovations.