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Nurturing regional innovation: the effects of bank competition in U.S

Tian, L. and Han, L. (2021) Nurturing regional innovation: the effects of bank competition in U.S. International Journal of Banking, Accounting and Finance, 12 (1). pp. 75-96. ISSN 1755-3830

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To link to this item DOI: 10.1504/IJBAAF.2021.111805


Whilst corporate innovation is one of the key drivers of regional economic growth, question remains over how regional corporate activities are affected by local banking market structure. By attaching regional corporate innovation activities to a market power hypothesis, this paper examines (1) if regional innovation activities would benefit from the improved banking market competition and (2) the variation of banking market competition effects on innovation outputs over unique regional characteristics, such as state-level R&D intensity and distribution of innovation activities. Using patent and citation data and local bank data from 51 states in U.S between 1992 and 2004, we show that improved local banking market competition increases both the quantity (patents) and quality (citations) of regional innovation outputs. It is also found that such a favourable effect on regional innovation is especially stronger for those states with low R&D intensity and those with more concentrated innovation activities.

Item Type:Article
Divisions:Henley Business School > Business Informatics, Systems and Accounting
ID Code:85780
Uncontrolled Keywords:Regional innovation; Banking market; R&D intensity;


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