Financialisation and innovation in emerging economics

Halima Jibril, Annina Kaltenbrunner and Effie Kesidou

No 27-2018, FMM Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute

Abstract: This article contributes to the literature on the financial constraints of innovation in two ways. First, we examine whether financialisation has transformed the relation between finance and innovation by assessing the association between companies' financial relations, both on the liability side and the asset side of their balance sheets, and intangible assets. Second, this is the first study that examines theoretically and empirically the link between financialisation and innovation in the context of emerging markets using the population of publicly listed companies in Brazil over the period 2011-2016. We find evidence that whilst financial liabilities do not affect investments on intangibles, higher financial assets and financial profits discourage investments on intangibles. Other indicators of financialisation are not significant. Thus, our results support the crowding-out hypothesis that financialisation i.e. companies' increased tendency to hold financial assets and generate revenue from financial income rather than their underlying operations, discourages investments on innovation.

Keywords: Financialisation; Intangible assets; Innovation-driven growth; Emerging economies (search for similar items in EconPapers)
Pages: 34 pages
Date: 2018
New Economics Papers: this item is included in nep-acc, nep-cfn, nep-hme and nep-ino
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.boeckler.de/pdf/p_fmm_imk_wp_27_2018.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imk:fmmpap:27-2018

Access Statistics for this paper

More papers in FMM Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Nemitz ().