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Financing Innovation in the United States, 1870 to Present


  • Naomi R. Lamoreaux

    (University of California, Los Angeles)

  • Kenneth L. Sokoloff


Although technological change is vital for economic growth, the interaction of finance and technological innovation is rarely studied. This pioneering volume examines the ways in which innovation is funded in the United States. In case studies and theoretical discussions, leading economists and economic historians analyze how inventors and technologically creative entrepreneurs have raised funds for their projects at different stages of U.S. economic development, beginning with the post-Civil War period of the Second Industrial Revolution. Their discussions point to intriguing insights about how the nature of the technology may influence its financing and, conversely, how the availability of funds influences technological advances. These studies show that over the long history of American technological advancement, inventors and innovators have shown considerable flexibility in finding ways to finance their work. They have moved to cities to find groups of local investors; they have worked for large firms that could tap the securities market for funds; they have looked to the federal government for research and development funding; and they have been financed by the venture capital industry. The studies make it clear that methods of funding innovation--whether it is in the auto industry or information technology--have important implications for both the direction of technological change and the competitive dynamism of the economy.

Suggested Citation

  • Naomi R. Lamoreaux & Kenneth L. Sokoloff (ed.), 2009. "Financing Innovation in the United States, 1870 to Present," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262513323, January.
  • Handle: RePEc:mtp:titles:0262513323

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    References listed on IDEAS

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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Yochanan Shachmurove, 2011. "First-Round Entrepreneurial Investments: Where, When and Why?," PIER Working Paper Archive 11-017, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.

    More about this item


    technology; innovation; financing;

    JEL classification:

    • N0 - Economic History - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights


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