The limits of lending

Banks and technology adoption across Russia

Cagatay Bircan, Ralph de Haas

Research output: Contribution to journalArticleScientificpeer-review

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
Article numberhhz060
JournalThe Review of Financial Studies
DOIs
Publication statusE-pub ahead of print - Jun 2019

Fingerprint

Bank lending
Russia
Innovation
Technology adoption
Bank credit
Developing countries
Credit markets
Credit constraints
Production process
Suppliers

Keywords

  • credit constraints
  • firm innovation
  • technological change

Cite this

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title = "The limits of lending: Banks and technology adoption across Russia",
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.",
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The limits of lending : Banks and technology adoption across Russia. / Bircan, Cagatay; de Haas, Ralph.

In: The Review of Financial Studies, 06.2019.

Research output: Contribution to journalArticleScientificpeer-review

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