TY  - RPRT
        AU  - Gorodnichenko, Yuriy
AU  - Schnitzer, Monika
        TI  - Financial Constraints and Innovation: Why Poor Countries Don't Catch Up
        PY  - 2010/Feb/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 4786
        UR  - https://www.iza.org/publications/dp4786
        AB  - This paper examines micro-level channels of how financial development can affect macroeconomic outcomes like the level of income and export intensity. We investigate theoretically and empirically how financial constraints affect a firm's innovation and export activities, using unique firm survey data which provides direct measures for innovations and firm-specific financial constraints. We find that financial constraints restrain the ability of domestically owned firms to innovate and export and hence to catch up to the technological frontiers. This negative effect is amplified as financial constraints force export and innovation activities to become substitutes although they are generally natural complements.
        KW  - innovation
KW  - productivity
KW  - financial constraint
KW  - export
KW  - technology frontier
KW  - BEEPS
        ER  -