Financial Constraints and Innovation: Why Poor Countries Don't Catch Up
By Y. Gorodnichenko, Monika Schnitzer. Social Science Research Network, 2013
596 citations recorded by the source corpus.
This paper examines micro-level channels of how financial development can affect macroeconomic outcomes like the level of income and export intensity. We investigate theoretically and empirically how financial constraints affect a firm's innovation and export activities, using unique firm survey data which provides direct measures for innovations and firm-specific financial constraints. We find that financial constraints restrain the ability of domestically owned firms to innovate and export and hence to catch up to the technological frontiers. This negative effect is amplified as financial constraints force export and innovation activities to become substitutes although they are generally natural complements.
Subfields: Accounting, Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/fd685df2b775a8db93da138b53560f018c6adec8
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Citations in the corpus
- Subsidies, financial constraints and firm innovative activities in emerging economies (2017, background): “2012)), as well as direct measures of financial constraints reported by firms (similar to Aghion et al. 2012; Gorodnichenko and Schnitzer 2013).”
- The Decision to Import Capital Goods in India : Firms’ Financial Factors Matter (2012, unknown): “In a different setting, Gorodnichenko and Schnitzer (2010) use a survey of firms in Eastern European countries and show that financial constraints decrease investment in innovation by domestic firms.”
- Technological Innovation, Resource Allocation, and Growth (2012, unknown): “…emphasizes the role of technological progress in promoting growth at the aggregate level (see e.g. Aghion and Howitt, 1997) while abstracting away from the role of contracts and inner workings of the firms in developing innovation (e.g. Gorodnichenko and Schnitzer, 2010; Manso, 2011; Seru, 2012).”