| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5066996 | European Economic Review | 2012 | 12 Pages |
We examine the impacts of both domestic and international financial market development on R&D intensities in 22 manufacturing industries in 18 OECD countries for the period 1990-2003. We take account of such industry characteristics as the need for external financing and the amount of tangible assets. Multiple forms of domestic financial development are important determinants of R&D intensity but only foreign direct investment is significant among alternative measures of international financial development. We find the strongest effects for private bond-market capitalization, while FDI, private credit by banks, and stock-market capitalization have similar effects in terms of magnitude.
⺠We examine the impacts of both domestic and international financial market development on R&D intensities in OECD manufacturing industries. ⺠We take account of such industry characteristics as the need for external financing and the amount of tangible assets. ⺠Many forms of domestic financial development are important determinants of R&D intensity, with a particularly strong effect of bond-market capitalization. ⺠Only foreign direct investment is significant among alternative measures of international financial development. ⺠We relate these results to theories of investment monitoring with uncertain outcomes.
