Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/174534 
Year of Publication: 
2016
Series/Report no.: 
LEM Working Paper Series No. 2016/25
Publisher: 
Scuola Superiore Sant'Anna, Laboratory of Economics and Management (LEM), Pisa
Abstract: 
The evolutionary taxonomy of financial systems, outlined by Dosi (1990), argued that market-based systems would be comparatively more engaged in the exploration of new technological paradigms, as an outcome of market selective pressure, whereas the more institutionalized finance allocation in credit-based systems would give them an advantage in cumulative learning. This article offers a preliminary assessment of those conjectures in light of the institutional change associated with the financialization process and the "maximizing shareholders value" principle. The available evidence suggests that financialization has de-linked the performance of firms on the financial markets from the determinants of firm-level growth and innovation. Selection among companies increasingly occurs on financial markets, along criteria of short-term returns. As such, financialization has contributed to compress and somewhat degrade the specific properties of the finance-innovation nexus of both financial system archetypes, deteriorating both static and Schumpeterian efficiency.
Subjects: 
Evolutionary Theory
Financial Systems
Firm growth
Innovation
Financialization
JEL: 
B52
G2
G3
L2
O3
Document Type: 
Working Paper

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