Article
Law, Stock Markets, and Innovation
The Journal of Finance
Document Type
Article
Disciplines
Publication Version
Accepted Manuscript
Publication Date
7-16-2013
DOI
10.1111/jofi.12040
Abstract
We study a broad sample of firms across 32 countries and find that strong shareholder protections and better access to stock market financing lead to substantially higher long-run rates of R&D investment, particularly in small firms, but are unimportant for fixed capital investment. Credit market development has a modest impact on fixed investment but no impact on R&D. These findings connect law and stock markets with innovative activities key to economic growth, and show that legal rules and financial developments affecting the availability of external equity financing are particularly important for risky, intangible investments not easily financed with debt.
Copyright Owner
John Wiley & Sons, Inc
Copyright Date
2013
Language
en
File Format
application/pdf
Citation Information
James R. Brown, Gustav Martinsson and Bruce C. Petersen. "Law, Stock Markets, and Innovation" The Journal of Finance Vol. 68 Iss. 4 (2013) p. 1517 - 1549 Available at: http://works.bepress.com/james-brown/11/
This is an accepted manuscript of an article from The Journal of Finance, 2013 68(4); 1517-1549. DOI: 10.1111/jofi.12040. Posted with permission.