RISK CAPITAL, PRIVATE CREDIT AND INNOVATIVE PRODUCTION

James Ang and Jakob Madsen

No 08-12, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: Although ideas production plays a critical role for growth, there has been only a modicum of research on the role played by financial forces in fostering new inventions. Drawing on Schumpeterian growth theory, this paper tests the roles of risk capital and private credit in stimulating knowledge production. Using panel data for 77 countries over the period 1965-2009, it is found that countries with more developed financial systems are more innovative. A stronger patent protection framework, on the other hand, curbs innovative production.

Keywords: Schumpeterian growth; financial development; venture capital (search for similar items in EconPapers)
JEL-codes: O30 O40 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2012-03
New Economics Papers: this item is included in nep-cba, nep-ent, nep-fdg and nep-knm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Journal Article: Risk capital, private credit, and innovative production (2012)
Journal Article: Risk capital, private credit, and innovative production (2012)
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