- 28 Jun 2018
Banking Crises and Corporate Innovation
28 Jun 2018 - 12:00 pm - 1:00 pm
(joint work with Ulrich Schüwer, University of Bonn)
Abstract: We examine whether and how banking crises affect corporate innovations, using data on patent quantity, quality and portfolio structure of companies in manufacturing industries around the world over the period 1988 to 2012. We find that banking crises lead to relatively fewer patents in industries that depend more on external finance. A number of patent characteristics also indicate a negative effect of banking crises on innovation quality in these industries. This suggests that firms forego productivity-enhancing investments caused by financial constraints. Furthermore, our results show that banking crises lead to intensified sales (divestments) of existing patents in more finance dependent industries. In sum, our evidence highlights important real effects of banking crises on the economy.
Technical University of Munich
TUM School of Management