The finance/innovation nexus in Schumpeterian analysis: theory and application to the case of U.S. trustified capitalism

Beniamino Callegari ()
Additional contact information
Beniamino Callegari: BI – Norwegian Business School

Journal of Evolutionary Economics, 2018, vol. 28, issue 5, No 8, 1175-1198

Abstract: Abstract Joseph Schumpeter built his theory of economic development around the interaction between the entrepreneur and the banker, representations of the underlying finance/innovation nexus. The neo-Schumpeterian revival has marginalized this theoretical element, in favor of an interpretation focused primarily on technological aspects of innovation. Recent attempts by innovation scholars to re-integrate the missing financial elements have been hindered by this theoretical gap. The purpose of this paper is to contribute to the recovery of the finance/innovation nexus in the context of Schumpeter’s theory by proposing an original institutional interpretation of the relationship between finance and the entrepreneurial function. The new approach identifies the economic role of innovation as dependent on the contextual form taken by the related funding process. Application of these concepts to the U.S. trustified capitalism experience allows for an alternative interpretation linking corporate internalization of innovation and financial repression. A Schumpeterian trilemma involving monetary capitalism, financial autonomy of the corporate sector and financial stability is revealed. The proposed framework provides a flexible theoretical background for the development of our understanding of the current capitalist regime, open to further integration with other schools of economic thought.

Keywords: Innovation; Financial institutions; Trustified capitalism; Institutional economics; Joseph Schumpeter; Hyman Minsky (search for similar items in EconPapers)
JEL-codes: B25 B52 E02 N22 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://link.springer.com/10.1007/s00191-018-0601-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:joevec:v:28:y:2018:i:5:d:10.1007_s00191-018-0601-5

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/191/PS2

DOI: 10.1007/s00191-018-0601-5

Access Statistics for this article

Journal of Evolutionary Economics is currently edited by Uwe Cantner, Elias Dinopoulos, Horst Hanusch and Luigi Orsenigo

More articles in Journal of Evolutionary Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().