The impact of financial sector on innovation activity: theoretical background and new evidence from russian banking sector

Veysov, Alexander and Stolbov, Mikhail (2011): The impact of financial sector on innovation activity: theoretical background and new evidence from russian banking sector.

Abstract

This paper is to summarize the literature on finance-innovation link and produce evidence that the development of banking sector in Russia is to foster innovation process. Financeinnovation link is a new and scarcely covered issue. Nevertheless it is conventional wisdom that stock market institutions are preferable for financing innovation. But researchers claim that in the developing countries banking institution together with thorough government policy can foster innovations. Also they claim that stock market institutions are more suitable for financing breakthrough innovations, while banks are more suitable for incremental innovations. The main contribution of this paper is that is was empirically shown using panel data models that banks can facilitate innovation in Russia.

• Item Type: MPRA Paper
• Language: English
• Keywords: Finance, innovation, banking system, panel data, Russia, financial system. 1
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E60 - General

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