The Limits of Lending? Banks and Technology Adoption Across Russia

96 Pages Posted: 16 Apr 2019

See all articles by Cagatay Bircan

Cagatay Bircan

European Bank for Reconstruction and Development (EBRD)

Ralph De Haas

European Bank for Reconstruction and Development; Centre for Economic Policy Research (CEPR); KU Leuven

Date Written: April 2019

Abstract

We exploit historically-determined variation in local credit markets to identify the impact of bank lending on firm innovation across Russia. We find that deeper credit markets increase firms' use of bank credit, their adoption of new products and technologies, and productivity growth. This relationship is more pronounced in industries further from the technological frontier; more exposed to import competition; and that export more. These impacts are also stronger for firms near historical R&D centers or railways, and in regions with supportive institutions. Consistent with these results, credit markets contribute to economic growth in such regions.

Keywords: credit constraints, Firm innovation, institutions, Russia, Technological change

JEL Classification: D22, F63, G21, O12, O31

Suggested Citation

Bircan, Cagatay and De Haas, Ralph, The Limits of Lending? Banks and Technology Adoption Across Russia (April 2019). CEPR Discussion Paper No. DP13663, Available at SSRN: https://ssrn.com/abstract=3372862

Cagatay Bircan (Contact Author)

European Bank for Reconstruction and Development (EBRD) ( email )

One Exchange Square
London, EC2A 2JN
United Kingdom
+442073388508 (Phone)
+442073386111 (Fax)

HOME PAGE: http://cagataybircan.com

Ralph De Haas

European Bank for Reconstruction and Development ( email )

One Exchange Square
London, EC2A 2JN
United Kingdom

HOME PAGE: www.ebrd.com

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

KU Leuven ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

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