Banking and innovation: a review

Chen Lin, Sibo Liu and Lai Wei

Journal of Chinese Economic and Business Studies, 2023, vol. 21, issue 1, 143-176

Abstract: We summarize the major findings of empirical studies that examine the effect of banking development on innovation and highlight their relative contributions to our understanding of the various roles the banking sector plays in determining innovation. We reassess the effect of banking development and innovation, extending the scope of analysis to more granular dimensions of innovation and to Asian economies where financial markets are less developed. We find that while theoretical implications are generally indefinite about the effect of banking development on innovation, empirical findings are less ambiguous given their distinct focus of sample firms and the underlying channels investigated. The development conditions of financial markets also matter in drawing implications for the effect of financial institutions on innovation. Specifically, when the stock market is relatively less developed, as in most Asian economies, banks play a significant role in financing and promoting innovation. Therefore, it seems plausible for policy makers in these regions to strengthen the development of the banking sector and to improve the depth of the credit market.In this survey, we will summarize the major findings of the empirical studies that examine the effect of banking development on innovation and highlight their relative contributions to our understanding.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/14765284.2022.2127397 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Banking and Innovation: A Review (2018)
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:taf:jocebs:v:21:y:2023:i:1:p:143-176

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RCEA20

DOI: 10.1080/14765284.2022.2127397

Access Statistics for this article

Journal of Chinese Economic and Business Studies is currently edited by Professor Xiaming Liu

More articles in Journal of Chinese Economic and Business Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().