The Impact of Financial Sector on Innovation Activity: Theoretical Background and New Evidence from Russian Banking Sector

19 Pages Posted: 12 May 2012

See all articles by Alexander Veysov

Alexander Veysov

Moscow State Institute of International Relations (MGIMO)

Mikhail Stolbov

Moscow State Institute of International Relations (MGIMO-University)

Elena Chuchelina

affiliation not provided to SSRN

Date Written: January 1, 2011

Abstract

This paper is to summarize the literature on finance-innovation link and produce evidence that the development of banking sector in Russia is to foster innovation process. Finance-innovation link is a new and scarcely covered issue. Nevertheless it is conventional wisdom that stock market institutions are preferable for financing innovation. But researchers claim that in the developing countries banking institution together with thorough government policy can foster innovations. Also they claim that stock market institutions are more suitable for financing breakthrough innovations, while banks are more suitable for incremental innovations. The main contribution of this paper is that is was empirically shown using panel data models that banks can facilitate innovation in Russia.

Keywords: Finance, innovation, banking system, panel data, Russia, financial system

JEL Classification: C23, O31, G18, G21, E50

Suggested Citation

Veysov, Alexander and Stolbov, Mikhail and Chuchelina, Elena, The Impact of Financial Sector on Innovation Activity: Theoretical Background and New Evidence from Russian Banking Sector (January 1, 2011). Available at SSRN: https://ssrn.com/abstract=2056292 or http://dx.doi.org/10.2139/ssrn.2056292

Alexander Veysov (Contact Author)

Moscow State Institute of International Relations (MGIMO) ( email )

Prospekt Vernadskogo, 76
Moscow, 119454
Russia

Mikhail Stolbov

Moscow State Institute of International Relations (MGIMO-University) ( email )

Prospekt Vernadskogo, 76
Moscow, 119454
Russia

Elena Chuchelina

affiliation not provided to SSRN

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