Financial Development and Technology Diffusion

40 Pages Posted: 9 Nov 2014 Last revised: 9 Jan 2019

See all articles by Diego Comin

Diego Comin

Dartmouth College

Ramana Nanda

Imperial College Business School; Harvard University - Entrepreneurial Management Unit

Date Written: December 2018


We examine the extent to which financial market development impacts the diffusion of 16 major technologies, looking across 17 countries, from 1870 to 2000. We find that greater depth in financial markets leads to faster technology diffusion for more capital-intensive technologies, but only in periods closer to the invention of the technology. In fact, we find no differential effect of financial depth on the diffusion of capital-intensive technologies in the late stages of diffusion or in late adopters. Our results are consistent with a view that local financial markets play a critical role in facilitating the process of experimentation that is required for the initial commercialization and diffusion of technologies.

Keywords: banking, technology diffusion, experimentation, growth.

Suggested Citation

Comin, Diego and Nanda, Ramana, Financial Development and Technology Diffusion (December 2018). Harvard Business School Entrepreneurial Management Working Paper No. 15-036, Forthcoming in IMF Economic Review, Available at SSRN: or

Diego Comin

Dartmouth College ( email )

Department of Sociology
Hanover, NH 03755
United States

Ramana Nanda (Contact Author)

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Harvard University - Entrepreneurial Management Unit ( email )

Boston, MA 02163
United States


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