The Limits of Lending: Banks and Technology Adoption Across Russia

CentER Discussion Paper Series No. 2015-011

European Banking Center Discussion Paper Series No. 2015-001

65 Pages Posted: 27 Feb 2015

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

Multiple version iconThere are 2 versions of this paper

Date Written: February 26, 2015

Abstract

We exploit historical and contemporaneous variation in local credit markets across Russia to identify the impact of credit constraints on firm-level innovation. We find that access to bank credit helps firms to adopt existing products and production processes that are new to them. They introduce these technologies either with the help of suppliers and clients or by acquiring external know-how. We find no evidence that bank credit also stimulates firm innovation through in-house R&D. This suggests that banks can facilitate the discussion of technologies within developing countries but that their role in pushing the technological frontier is limited.

Keywords: Credit constraints; firm innovation; 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 (February 26, 2015). CentER Discussion Paper Series No. 2015-011, European Banking Center Discussion Paper Series No. 2015-001, Available at SSRN: https://ssrn.com/abstract=2570842 or http://dx.doi.org/10.2139/ssrn.2570842

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

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
75
Abstract Views
882
rank
298,222
PlumX Metrics