Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/163193
Authors: 
Ho, Chun-Yu
Huang, Shaoqing
Shi, Hao
Wu, Jun
Year of Publication: 
2017
Series/Report no.: 
ADBI Working Paper Series 694
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.
Subjects: 
Economics
Finance sector development
JEL: 
E02
G20
O30
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/3.0/igo/
Document Type: 
Working Paper

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