Product Quality, Innovation and Financial Constraints: Evidence from Greek Exporting Firms

This paper investigates the impact of innovation on product quality in the presence of financial constraints. We use a unique dataset from Greek exporting firms to estimate product quality at the firm level. Our empirical analysis shows that innovation enhances product quality, yet this effect is mitigated by financial constraints. The result remain robust when the endogeneity of innovative activity and the impact of the Greek financial crisis are considered.