Innovation and financial liberalization

James Ang

Journal of Banking & Finance, 2014, vol. 47, issue C, 214-229

Abstract: This paper attempts to shed some light on the role of financial sector policies in generating new knowledge, drawing on the experience of one of the fastest growing and largest developing countries. Using time series data for India over the period 1963–2005, the results indicate that interest rate restraints help generate ideas. Other financial repressionist policies, in the form of high reserve and liquidity requirements, as well as significant directed credit controls, appear to have a dampening effect on ideas production. These results lend some support to the argument that some form of financial sector reforms may help stimulate economic growth via increasing technological innovation.

Keywords: Financial liberalization; Schumpeterian growth; Innovative activity (search for similar items in EconPapers)
JEL-codes: O30 O40 O53 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:47:y:2014:i:c:p:214-229

DOI: 10.1016/j.jbankfin.2014.07.007

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