Credit Supply and Corporate Innovation

Mario Daniele Amore, Cédric Schneider, Alminas Žaldokas

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Abstrakt

We present evidence that banking development plays a key role in technological progress. We focus on manufacturing firms' innovative performance, measured by patent-based metrics, and employ exogenous variations in banking development arising from the staggered deregulation of banking activities across US states during the 1980s and 1990s. We find that interstate banking deregulation had significant beneficial effects on the quantity and quality of innovation activities, especially for firms highly dependent on external capital and located closer to entering banks. Furthermore, we find that these results are strongly driven by a greater ability of deregulated banks to geographically diversify credit risk.
OriginalsprogEngelsk
TidsskriftJournal of Financial Economics
Vol/bind109
Udgave nummer3
Sider (fra-til)835-855
ISSN0304-405X
DOI
StatusUdgivet - sep. 2013

Emneord

  • Banking deregulation
  • Financial development
  • Innovation
  • Risk diversification

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