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Finance and the Diffusion of Digital Technologies

Author

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  • Bruno Caprettini

    (Università di Roma “La Sapienza”)

Abstract

The paper examines how different dimensions of financial development have influenced firms’ willingness to adopt new digital technologies (IT). To do so, it introduces an econometric analysis based on an Error Correction Model run over a panel of fifteen industrialized countries. The results point to the importance of stock market development and suggest that market-based systems encourage digital investments better than bank-based ones. The evidence is consistent with theories that stress the effective selection of projects carried out by stock markets and the positive role that new financial tools traded within these markets had on IT adoption.

Suggested Citation

  • Bruno Caprettini, 2008. "Finance and the Diffusion of Digital Technologies," Rivista di Politica Economica, SIPI Spa, vol. 98(6), pages 79-122, November-.
    • Handle: RePEc:rpo:ripoec:v:98:y:2008:i:6:p:79-122
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    References listed on IDEAS

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    More about this item

    Keywords

    digital technologies; financial structure; cointegration;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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