The Limits of Lending: Banks and Technology Adoption Across Russia

Cagatay Bircan, R. de Haas

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Abstract

We exploit historical and contemporaneous variation in local credit markets across Russia to identify the impact of credit constraints on firm-level innovation. We find that access to bank credit helps firms to adopt existing products and production processes that are new to them. They introduce these technologies either with the help of suppliers and clients or by acquiring external know-how. We find no evidence that bank credit also stimulates firm innovation through in-house R&D. This suggests that banks can facilitate the discussion of technologies within developing countries but that their role in pushing the technological frontier is limited.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages65
Volume2015-001
Publication statusPublished - 26 Feb 2015

Publication series

NameEuropean Banking Center
Volume2015-001

Keywords

  • Credit Constraints
  • firn innovation
  • technological change

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    Bircan, C., & de Haas, R. (2015). The Limits of Lending: Banks and Technology Adoption Across Russia. (European Banking Center; Vol. 2015-001). Finance.