Financial inclusion and firm innovation in emerging markets
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2021-07-05
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en
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Abstract
Although innovation studies in emerging markets consider finance as an important driver for firm innovation in emerging markets, the interplay between financial inclusion and informal credit has not been fully exposed. This study addresses this shortcoming by examining the relationship among financial inclusion, institutional quality, and informal credit determining firm innovation in emerging markets. This study conducts a logistic regression analysis encompassing firm-level data. It is found that financial inclusion boosts firm innovation in emerging market. Firms that rely on informal credit when they are financially excluded caused by institutional voids decrease their innovativeness. Informal credit, however, can substitute for formal financial institutions since the result show a significant interaction effect. More interestingly are the results concerning institutional quality. This thesis has found that institutional quality does not enhance firm innovation in emerging markets. The same applies for the interaction effect, in which institutional quality does not increases the adoption of
financial services and credit allocation among firms in emerging markets
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Faculteit der Managementwetenschappen