Innovation, Information and Financial Architecture
No wp877, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan
Does a financial system architecture anchored on banks better than one centered on markets in fostering technological innovations as engine of growth? In a panel of industrial sectors across a large cross section of countries, I find that while market-based systems have a general positive effect on innovations in all economic sectors, bank-based systems foster more rapid technological progress in more informationintensive industrial sectors, suggesting a heterogeneous impact of financial architecture. Thus, the relative performance of bank-based systems vis-??-vis market-based systems depends on the industrial structure of the economy.
Keywords: Technological Progress; Innovation; Intangible Assets; Financial System Architecture; Bank-Based System; Market-Based System (search for similar items in EconPapers)
JEL-codes: G1 G21 G32 E44 O14 O31 O34 O4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-ino and nep-mac
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Journal Article: Innovation, Information, and Financial Architecture (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:wdi:papers:2007-877
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