Financial Deepening and Innovation Efficiency: The Role of Political Institutions
Ho, Chun-Yu; Huang, Shaoqing; Shi, Hao; Wu, Jun | March 2017
Abstract
This study investigates the effects of financial deepening on innovation efficiency for various democratic levels of political institutions using panel data from 69 countries spanning 1970–2010. Banking market deepening is associated with increased innovation efficiency only when political institutions are sufficiently democratic. In contrast, the enhancing effect of stock market deepening on innovation efficiency requires a lower level of political democracy. Furthermore, the results are stronger for countries with lower incomes than for countries with higher incomes. Our results are robust for the use of the instrumental variable approach and alternative measures for financial deepening, democracy, and innovation inputs.
Citation
Ho, Chun-Yu; Huang, Shaoqing; Shi, Hao; Wu, Jun. 2017. Financial Deepening and Innovation Efficiency: The Role of Political Institutions. © Asian Development Bank Institute. http://hdl.handle.net/11540/7784.Keywords
Taxation
Public Debt
Local Government
Debt Management
Pension Funds
Mutual Funds
Social Equity
Financial Aspects
Fiscal Policy
Finance
Public Finance
Governance
National Budget
Budgetary Policy
Educational Budget
Public Financial Management
Financial System
Financial Statistics
Local taxation
Options
Government
Local government
Taxation
Employee pension trusts
Investment management
Investments
Multiemployer pension plans
Keogh plans
Individual retirement accounts
Pension plans
Employee pension trusts
Pension trusts
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