The Impact of Financial Structure on Technical Innovation

Abstract

We employed the fixed effects model to examine (1) the relationship between China’s financial structure and technical innovation and (2) the impact of China’s financial structure on heterogeneous technical innovation. This study was conducted using China’s provincial panel data from 2004 to 2016. Results show that the market-oriented financial structure had an incentive effect that led to improvement in the level of technical innovation. Furthermore, we found that financial structure had different impacts on heterogeneous technical innovation. Specifically, the market-oriented financial structure significantly enhanced the improvement in the output level of regional original technical innovation; however, it had no significant impact on imitative technical innovation.

Keywords: financial structure, technical innovation, empirical research

DOI: 10.7176/RJFA/11-17-01

Publication date:October 31^st 2020