Advanced Search
MyIDEAS: Login

Risk Capital, Private Credit And Innovative Production

Contents:

Author Info

  • James B. Ang
  • Jakob B. Madsen

Abstract

Although ideas production plays a critical role for growth, there has been only a modicum of research on the role played by financial forces in fostering new inventions. Drawing on Schumpeterian growth theory, this paper tests the roles of risk capital and private credit in stimulating knowledge production. Using panel data for 77 countries over the period 1965-2009, it is found that countries with more developed financial systems are more innovative. A stronger patent protection framework, on the other hand, curbs innovative production.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.buseco.monash.edu.au/eco/research/papers/2012/0812riskcapitalangmadsen.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 08-12.

as in new window
Length: 30 pages
Date of creation: Mar 2012
Date of revision:
Handle: RePEc:mos:moswps:2012-08

Contact details of provider:
Postal: Department of Economics, Monash University, Victoria 3800, Australia
Phone: +61-3-9905-2493
Fax: +61-3-9905-5476
Email:
Web page: http://www.buseco.monash.edu.au/eco/
More information through EDIRC

Order Information:
Email:
Web: http://www.buseco.monash.edu.au/eco/research/papers/

Related research

Keywords: Schumpeterian growth; financial development; venture capital;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Greenwood, J. & Jovanovic, B., 1988. "Financial Development, Growth, And The Distribution Of Income," RCER Working Papers 131, University of Rochester - Center for Economic Research (RCER).
  2. Bart Hobijn & Boyan Jovanovic, 2001. "The Information-Technology Revolution and the Stock Market: Evidence," American Economic Review, American Economic Association, vol. 91(5), pages 1203-1220, December.
  3. James B. Ang & Jakob B. Madsen, 2010. "Can Second-Generation Endogenous Growth Models Explain The Productivity Trends And Knowledge Production In The Asian Miracle Economies?," CAMA Working Papers 2010-05, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  4. Jakob B. Madsen & Shishir Saxena & James B. Ang, 2009. "The Indian Growth Miracle And Endogenous Growth," Development Research Unit Working Paper Series 03-09, Monash University, Department of Economics.
  5. de la Fuente, Angel & Marin, JoseMaria, 1996. "Innovation, bank monitoring, and endogenous financial development," Journal of Monetary Economics, Elsevier, vol. 38(2), pages 269-301, October.
  6. Yuriy Gorodnichenko & Monika Schnitzer, 2013. "Financial Constraints And Innovation: Why Poor Countries Don'T Catch Up," Journal of the European Economic Association, European Economic Association, vol. 11(5), pages 1115-1152, October.
  7. Yongseok Shin & Joe Kaboski & Francisco J. Buera, 2008. "Finance and Development: A Tale of Two Sectors," 2008 Meeting Papers 955, Society for Economic Dynamics.
  8. Maria Fuensanta Morales, 2001. "Financial Intermediation in a Model of Growth through Creative Destruction," UFAE and IAE Working Papers 487.01, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  9. Philippe Aghion & Diego Comin & Peter Howitt, 2006. "When Does Domestic Saving Matter for Economic Growth?," NBER Working Papers 12275, National Bureau of Economic Research, Inc.
  10. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
  11. Madsen, Jakob & Ang, James & Banerjee, Rajabrata, 2010. "Four Centuries of British Economic Growth: The Roles of Technology and Population," MPRA Paper 23510, University Library of Munich, Germany.
  12. Baltagi, Badi H. & Demetriades, Panicos O. & Law, Siong Hook, 2009. "Financial development and openness: Evidence from panel data," Journal of Development Economics, Elsevier, vol. 89(2), pages 285-296, July.
  13. Durlauf,S.N. & Johnson,P.A. & Temple,J.R.W., 2004. "Growth econometrics," Working papers 18, Wisconsin Madison - Social Systems.
    • Durlauf, Steven N. & Johnson, Paul A. & Temple, Jonathan R.W., 2005. "Growth Econometrics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 8, pages 555-677 Elsevier.
  14. Manju Puri & Rebecca Zarutskie, 2008. "On the Lifecycle Dynamics of Venture-Capital- and Non-Venture-Capital-Financed Firms," Working Papers 08-13, Center for Economic Studies, U.S. Census Bureau.
  15. Carmen M. Reinhart & Kenneth S. Rogoff, 2010. "From Financial Crash to Debt Crisis," NBER Working Papers 15795, National Bureau of Economic Research, Inc.
  16. Laura Bottazzi & Giovanni Peri, 2007. "The International Dynamics of R&D and Innovation in the Long Run and in The Short Run," Economic Journal, Royal Economic Society, vol. 117(518), pages 486-511, 03.
  17. James B. Ang & Jakob B. Madsen, 2013. "International R&D Spillovers And Productivity Trends In The Asian Miracle Economies," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1523-1541, 04.
  18. Peretto, P. & Smulders, J.A., 2002. "Technological distance, growth and scale effects," Open Access publications from Tilburg University urn:nbn:nl:ui:12-89730, Tilburg University.
  19. Philippe Aghion & Peter Howitt & David Mayer-Foulkes, 2005. "The Effect of Financial Development on Convergence: Theory and Evidence," The Quarterly Journal of Economics, MIT Press, vol. 120(1), pages 173-222, January.
  20. Jakob B. Madsen & EPRU & FRU, 2007. "Semi-Endogenous Versus Schumpeterian Growth Models: Testing The Knowledge Production Function Using International Data," Development Research Unit Working Paper Series 26-07, Monash University, Department of Economics.
  21. Andrei Shleifer & Florencio Lopez-de-Silanes & Rafael La Porta, 2008. "The Economic Consequences of Legal Origins," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 285-332, June.
  22. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  23. Rioja, Felix & Valev, Neven, 2004. "Does one size fit all?: a reexamination of the finance and growth relationship," Journal of Development Economics, Elsevier, vol. 74(2), pages 429-447, August.
  24. Panicos O. Demetriades & Khaled A.Hussein, 1995. "Does Financial Development Cause Economic Growth? Time-Series Evidence from 16 Countries," Keele Department of Economics Discussion Papers (1995-2001) 95/13, Department of Economics, Keele University.
  25. Blackburn, Keith & Hung, Victor T Y, 1998. "A Theory of Growth, Financial Development and Trade," Economica, London School of Economics and Political Science, vol. 65(257), pages 107-24, February.
  26. Hicks, J. R., 1969. "A Theory of Economic History," OUP Catalogue, Oxford University Press, number 9780198811633.
  27. Scarpetta, Stefano & Fally, Thibault & Aghion, Philippe, 2007. "Credit Constraints as a Barrier to the Entry and Post-Entry Growth of Firms," Scholarly Articles 4554208, Harvard University Department of Economics.
  28. Diego Valderrama, 2008. "Are global imbalances due to financial underdevelopment in emerging economies?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue apr11.
  29. Ang, James B., 2011. "Financial development, liberalization and technological deepening," European Economic Review, Elsevier, vol. 55(5), pages 688-701, June.
  30. Philippe Aghion & Peter Howitt, 2009. "The Economics of Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012634, December.
  31. Era Dabla-Norris & Erasmus K. Kersting & Geneviève Verdier, 2012. "Firm Productivity, Innovation, and Financial Development," Southern Economic Journal, Southern Economic Association, vol. 79(2), pages 422-449, October.
  32. Iain M. Cockburn & Megan J. MacGarvie, 2009. "Patents, Thickets and the Financing of Early-Stage Firms: Evidence from the Software Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(3), pages 729-773, 09.
  33. James B. Ang & Warwick J. McKibbin, 2005. "Financial Liberalization, Financial Sector Development And Growth: Evidence From Malaysia," CAMA Working Papers 2005-05, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  34. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, volume 1, number 8973.
  35. Jakob B. Madsen & Shishir Saxena & James B. Ang, 2008. "The Indian Growth Miracle And Endogenous Growth," CAMA Working Papers 2008-29, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  36. Panicos O. Demetriades & Philip Arestis, 1996. "Financial Development and Economic Growth: Assessing the Evidence," Keele Department of Economics Discussion Papers (1995-2001) 96/16, Department of Economics, Keele University.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mos:moswps:2012-08. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Simon Angus).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.