Credit Supply and Corporate Innovation

Mario Daniele Amore, Cédric Schneider, Alminas Žaldokas

Research output: Contribution to journal › Journal article › Research › peer-review

Abstract

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.
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.
LanguageEnglish
JournalJournal of Financial Economics
Volume109
Issue number3
Pages835-855
ISSN0304-405X
DOIs
StatePublished - Sep 2013

Keywords

    Cite this

    Amore, Mario Daniele ; Schneider, Cédric ; Žaldokas, Alminas . / Credit Supply and Corporate Innovation. In: Journal of Financial Economics. 2013 ; Vol. 109, No. 3. pp. 835-855
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    Amore, MD, Schneider, C & Žaldokas, A 2013, 'Credit Supply and Corporate Innovation' Journal of Financial Economics, vol. 109, no. 3, pp. 835-855. DOI: 10.1016/j.jfineco.2013.04.006

    Credit Supply and Corporate Innovation. / Amore, Mario Daniele; Schneider, Cédric; Žaldokas, Alminas .

    In: Journal of Financial Economics, Vol. 109, No. 3, 09.2013, p. 835-855.

    Research output: Contribution to journal › Journal article › Research › peer-review

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    Amore MD, Schneider C, Žaldokas A. Credit Supply and Corporate Innovation. Journal of Financial Economics. 2013 Sep;109(3):835-855. Available from, DOI: 10.1016/j.jfineco.2013.04.006

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