Financial Structure and Firm Innovation : Evidence from around the World
This paper analyzes the relationship between financial structure and innovation. Analysis of cross-country micro data over 2009–18 shows that a firm’s financial sources matter for the choice to innovate and the extent to which a firm innovates. The...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/145871621868536350/Financial-Structure-and-Firm-Innovation-Evidence-from-around-the-World http://hdl.handle.net/10986/35631 |
| Summary: | This paper analyzes the relationship
between financial structure and innovation. Analysis of
cross-country micro data over 2009–18 shows that a firm’s
financial sources matter for the choice to innovate and the
extent to which a firm innovates. The relationship is
stronger for firms relying on non-bank financial
intermediaries and for firms in low-technology sectors.
Moreover, the use of external sources of finance is
associated with improved prospects of innovation, especially
in more financially developed countries. These findings
suggest that developing the financial sector can bring
benefits in terms of innovation. |
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