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Effect of financial development on innovation: roles of market institutions

Studies show that the impact of financial markets on innovation is mixed. This paper examines whether financial development can help explain the pace of innovation in 68 developed and developing countries during 1995–2018. By utilizing panel data and incorporating market institutions (market creatin...

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Main Authors: Trinugroho, Irwan, Law, Siong Hook, Lee, Weng Chang, Wiwoho, Jamal, Sergi, Bruno S.
Format: Article
Language:English
Published: Elsevier 2021
Online Access:http://psasir.upm.edu.my/id/eprint/96889/1/ABSTRACT.pdf
http://psasir.upm.edu.my/id/eprint/96889/
https://www.sciencedirect.com/science/article/pii/S0264999321001875
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spelling my.upm.eprints.968892022-11-30T06:16:16Z http://psasir.upm.edu.my/id/eprint/96889/ Effect of financial development on innovation: roles of market institutions Trinugroho, Irwan Law, Siong Hook Lee, Weng Chang Wiwoho, Jamal Sergi, Bruno S. Studies show that the impact of financial markets on innovation is mixed. This paper examines whether financial development can help explain the pace of innovation in 68 developed and developing countries during 1995–2018. By utilizing panel data and incorporating market institutions (market creating, market regulating, market stabilizing, and market legitimizing), we discovered a nonlinear effect in the finance–innovation relationship. Market institutions would enhance such a relationship, and the credit and equity market development levels are beneficial to a country's innovation only up to a certain threshold. The findings reveal a difference between developed and developing countries in terms of innovation, and more innovation activities are observed after the 2007–2009 global financial crisis. Elsevier 2021 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/96889/1/ABSTRACT.pdf Trinugroho, Irwan and Law, Siong Hook and Lee, Weng Chang and Wiwoho, Jamal and Sergi, Bruno S. (2021) Effect of financial development on innovation: roles of market institutions. Economic Modelling, 103. art. no. 105598. pp. 1-16. ISSN 0264-9993 https://www.sciencedirect.com/science/article/pii/S0264999321001875 10.1016/j.econmod.2021.105598
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description Studies show that the impact of financial markets on innovation is mixed. This paper examines whether financial development can help explain the pace of innovation in 68 developed and developing countries during 1995–2018. By utilizing panel data and incorporating market institutions (market creating, market regulating, market stabilizing, and market legitimizing), we discovered a nonlinear effect in the finance–innovation relationship. Market institutions would enhance such a relationship, and the credit and equity market development levels are beneficial to a country's innovation only up to a certain threshold. The findings reveal a difference between developed and developing countries in terms of innovation, and more innovation activities are observed after the 2007–2009 global financial crisis.
format Article
author Trinugroho, Irwan
Law, Siong Hook
Lee, Weng Chang
Wiwoho, Jamal
Sergi, Bruno S.
spellingShingle Trinugroho, Irwan
Law, Siong Hook
Lee, Weng Chang
Wiwoho, Jamal
Sergi, Bruno S.
Effect of financial development on innovation: roles of market institutions
author_facet Trinugroho, Irwan
Law, Siong Hook
Lee, Weng Chang
Wiwoho, Jamal
Sergi, Bruno S.
author_sort Trinugroho, Irwan
title Effect of financial development on innovation: roles of market institutions
title_short Effect of financial development on innovation: roles of market institutions
title_full Effect of financial development on innovation: roles of market institutions
title_fullStr Effect of financial development on innovation: roles of market institutions
title_full_unstemmed Effect of financial development on innovation: roles of market institutions
title_sort effect of financial development on innovation: roles of market institutions
publisher Elsevier
publishDate 2021
url http://psasir.upm.edu.my/id/eprint/96889/1/ABSTRACT.pdf
http://psasir.upm.edu.my/id/eprint/96889/
https://www.sciencedirect.com/science/article/pii/S0264999321001875
_version_ 1751538266611384320
score 13.211869

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