Banks and Innovation: Microeconometric Evidence on Italian Firms

Luigi Benfratello, Fabio Schiantarelli and Alessandro Sembenelli

No 2032, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper we investigate the effect of local banking development on firms' innovative activities, using a rich data set on innovation for a large number of Italian firms over the 1990's. There is evidence that banking development affects the probability of process innovation, particularly for small firms and for firms in high(er) tech sectors and in sectors more dependent upon external finance. The evidence for product innovation is weaker. There is also some evidence that banking development reduces the cash flow sensitivity of fixed investment spending, particularly for small firms, and that it increases the probability they will engage in R&D.

Keywords: financial development; R&D; banks; investment; innovation (search for similar items in EconPapers)
JEL-codes: D24 G21 G38 O31 O33 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2006-03
New Economics Papers: this item is included in nep-cba, nep-eec, nep-ent, nep-fin, nep-fmk, nep-ino, nep-mic and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Published - published in:Journal of Financial Economics, 2008, 90 (2), 197 - 217

Downloads: (external link)
https://docs.iza.org/dp2032.pdf (application/pdf)

Related works:
Journal Article: Banks and innovation: Microeconometric evidence on Italian firms (2008)
Working Paper: Banks and Innovation: Microeconometric Evidence on Italian Firms (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp2032

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().