Financial Reforms and Innovation: A Micro-Macro Perspective
نویسندگان
چکیده
We develop a horizontal R&D growth model that allows us to investigate the different channels through which financial reforms affect investment and patent activity. First, “micro” reform abolishes barriers entry in banking sector produces straightforward result: decrease lending rates stimulates economic growth. Second, “macro” removes restrictions on banks’ reserves credit controls. While this increases liquidity, it also risk of default, potentially raising cost borrowing. This we dub “reserves paradox” – makes banks offset rise default rate with higher spread between loans deposit rates. Thus our suggests whilst micro boost innovation, macro may appear negative. test find empirical support for these propositions using sample 21 OECD countries. JEL Classification: G2, C23, E44, O43
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ژورنال
عنوان ژورنال: Social Science Research Network
سال: 2021
ISSN: ['1556-5068']
DOI: https://doi.org/10.2139/ssrn.3839529