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...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2021
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| Online Access: | http://psasir.upm.edu.my/id/eprint/96889/ http://psasir.upm.edu.my/id/eprint/96889/1/ABSTRACT.pdf |
| _version_ | 1848862468780064768 |
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| author | Trinugroho, Irwan Law, Siong Hook Lee, Weng Chang Wiwoho, Jamal Sergi, Bruno S. |
| author_facet | Trinugroho, Irwan Law, Siong Hook Lee, Weng Chang Wiwoho, Jamal Sergi, Bruno S. |
| author_sort | Trinugroho, Irwan |
| building | UPM Institutional Repository |
| collection | Online Access |
| 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. |
| first_indexed | 2025-11-15T13:17:30Z |
| format | Article |
| id | upm-96889 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T13:17:30Z |
| publishDate | 2021 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-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 |
| spellingShingle | Trinugroho, Irwan Law, Siong Hook Lee, Weng Chang Wiwoho, Jamal Sergi, Bruno S. Effect of financial development on innovation: roles of market institutions |
| title | 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_short | Effect of financial development on innovation: roles of market institutions |
| title_sort | effect of financial development on innovation: roles of market institutions |
| url | http://psasir.upm.edu.my/id/eprint/96889/ http://psasir.upm.edu.my/id/eprint/96889/ http://psasir.upm.edu.my/id/eprint/96889/ http://psasir.upm.edu.my/id/eprint/96889/1/ABSTRACT.pdf |