The impact of financial sector on innovation activity: theoretical background and new evidence from russian banking sector

Alexander Veysov and Mikhail Stolbov

MPRA Paper from University Library of Munich, Germany

Abstract: This paper is to summarize the literature on finance-innovation link and produce evidence that the development of banking sector in Russia is to foster innovation process. Financeinnovation link is a new and scarcely covered issue. Nevertheless it is conventional wisdom that stock market institutions are preferable for financing innovation. But researchers claim that in the developing countries banking institution together with thorough government policy can foster innovations. Also they claim that stock market institutions are more suitable for financing breakthrough innovations, while banks are more suitable for incremental innovations. The main contribution of this paper is that is was empirically shown using panel data models that banks can facilitate innovation in Russia.

Keywords: Finance; innovation; banking system; panel data; Russia; financial system. 1 (search for similar items in EconPapers)
JEL-codes: E60 O31 (search for similar items in EconPapers)
Date: 2011-01
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:38747

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