Firm Productivity, innovation and Financial Development
Electronic Access:
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Summary:
How do firm-specific actions-in particular, innovation-affect firm productivity? And what is the role of the financial sector in facilitating higher productivity? Using a rich firm-level dataset, we find that innovation is crucial for firm performance as it directly and measurably increases productivity. Moreover, its effects on productivity are mediated through the financial sector; firms reap the maximum benefits from innovation in countries with well-developed financial sectors. This effect is particularly important for firms in high-tech sectors, which typically have higher external financing needs.
Series:
Working Paper No. 2010/049
Subject:
Capacity utilization Emerging technologies Financial markets Financial sector development Production Productivity Technology Total factor productivity
English
Publication Date:
February 1, 2010
ISBN/ISSN:
9781451963250/1018-5941
Stock No:
WPIEA2010049
Pages:
36
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