Banking Crises and Investments in Innovation

DC FieldValueLanguage
dc.contributor.authorPeia, Oana-
dc.date.accessioned2017-12-12T17:40:48Z-
dc.date.available2017-12-12T17:40:48Z-
dc.date.copyright2017 the Authoren
dc.date.issued2017-12-
dc.identifier.other201727-
dc.identifier.urihttp://hdl.handle.net/10197/9101-
dc.description.abstractThis paper proposes a new channel to explain the medium- to long-term effects of banking crises on the real economy. It embeds a banking sector prone to runs in a stylized growth model to show that episodes of bank distress affect not only the volume, but also the composition of firm investment, by disproportionally decreasing investments in innovation. Thishypothesis is confirmed empirically employing industry-level data on R&D spending around 13 recent banking crises episodes. Using difference-in-difference identification strategies, I show that industries that depend more on external finance, in more bank-based economies, invest disproportionally less in R&D following systemic banking crises. These industries also have a lower share of R&D spending in total investment, suggesting a shift in the composition of investment that is specific to recessions following banking crises and not other business cycle recessions.en
dc.language.isoenen
dc.publisherUniversity College Dublin. School of Economicsen
dc.relation.ispartofseriesUCD Centre for Economic Research Working Paper Seriesen
dc.relation.ispartofseries2017/27en
dc.subjectBanking crisesen
dc.subjectR&D investmenten
dc.subjectFinancial dependenceen
dc.subjectGlobal gamesen
dc.subject.classificationG01en
dc.subject.classificationG21en
dc.subject.classificationE22en
dc.titleBanking Crises and Investments in Innovationen
dc.typeWorking Paperen
dc.statusNot peer revieweden
dc.identifier.startpage1en
dc.identifier.endpage44en
dc.neeo.contributorPeia|Oana|aut|-
dc.date.updated2017-12-08-
dc.rights.licensehttps://creativecommons.org/licenses/by-nc-nd/3.0/ie/en
item.grantfulltextopen-
item.fulltextWith Fulltext-
Appears in Collections:Economics Working Papers & Policy Papers
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