توسعه مالی، مالکیت دولتی بانک ها و نوآوری شرکت

Using a newly-available World Bank survey of over 28,000 firms from 46 countries, we examine how financial development affects firm innovation around the world. We find that while stock market development significantly enhances firm innovation, banking sector development has mixed effects. We show that the latter result can be explained by different levels of government ownership of banks. Specifically, in countries with lower government ownership of banks, banking sector development significantly enhances firm innovation; while in countries with higher government ownership of banks, banking sector development has no significant or sometimes even significantly negative effects on firm innovation. Such negative effects are significantly stronger for smaller firms. The results are robust to various controls such as firms’ human capital and ownership structure, to estimations using instrumental variable techniques and alternative measures of firm innovation.

How does financial development affect economic growth? In the nearly two decades since the seminal work of King and Levine, 1993a and King and Levine, 1993b, economists have identified two main channels: total factor productivity and capital accumulation (e.g., Levine and Zervos, 1998). Despite abundant macroeconomic evidence, however, microeconomic evidence that identifies these channels is surprisingly lacking.1 To help address this, we use a new World Bank Investment Climate Survey dataset collected from over 28,000 firms in 46 countries between 2002 and 2005 to examine the effects of financial development on firm innovation, which is a key source of growth in total factor productivity, and total factor productivity growth is the “ultimate source of long-run economic growth” (Jorgenson, 2005). Our research shows that while stock market development has positive and significant effects on firm innovation, the impact of banking sector development is mixed.

Abundant empirical evidence has shown that financial development promotes economic growth at the macroeconomic level, mainly through the total factor productivity (TFP) and capital accumulation channels. But microeconomic evidence on this is quite limited. We focus on the TFP channel and use a newly-available World Bank survey to investigate how financial development affects firm innovation in 46 countries. Our definition of innovation is broad enough to include new products and technologies, production processes, and knowledge transfers. Our results show that stock market development promotes firm innovation, while banking sector development has mixed effects.