Institutions, Innovations, and Growth

11 Pages Posted: 12 Feb 2006

See all articles by Haizhou Huang

Haizhou Huang

International Monetary Fund (IMF)

Chenggang Xu

University of Hong Kong

Multiple version iconThere are 3 versions of this paper

Date Written: March 1999


The fundamental importance of economic institutions for economic growth through their impact on technological change has been argued, reconfirmed by recent empirical studies, but not examined theoretically. This paper tries to fill that gap. In the model proposed, economic growth is affected by the efficiency and riskiness of research and development (R&D), which are endogenized through financial institutions. The theory and its results shed lights on the debate of convergence versus divergence; the East Asia miracle versus the East Asia financial crisis; and the rise and fall of centralized economies.

Keywords: Financial Institutions, Technological Innovations, Economic Growth

JEL Classification: E20, G28, O31, O40

Suggested Citation

Huang, Haizhou and Xu, Chenggang, Institutions, Innovations, and Growth (March 1999). IMF Working Paper No. 99/34, Available at SSRN:

Haizhou Huang (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Chenggang Xu

University of Hong Kong ( email )

Pokfulam Road
Hong Kong, Pokfulam HK

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