|
|
|
| The Impact of Stock Market Concentration on Innovativeness and Technical Progress:A Study Based on Cross-country Panel Data |
| Zhou Hui |
| (Institute of Advanced Studies in Humanities and Social Science, Beijing Normal University, Zhuhai 519087, China) |
|
|
|
|
Abstract Innovation and technological progress have become important engines of world economic growth. China has put forward the long-term goal of 2035 to enter the forefront of innovative countries. Previous studies have discussed innovation and technological progress from the perspective of financial development, and focused on the total size of the financial system. The expansion of a country's financial system, especially the expansion of the banking sector, is believed to significantly promote economic growth. However, some studies have found that the total size of the stock market, as measured by the ratio of the total market value to GDP, has no significant relationship with economic growth, capital accumulation and productivity improvement. In addition,the size of financial market is not equal to efficiency, and the level of financial development is not necessarily commensurate with its size. There are certain limitations in measuring the level of financial development only by the size of financial market.#br#In order to measure the financial development, this paper collects a sample of 55 countries (regions) from 1988 to 2019 and employs the fixed effect model to study the impact of stock market financing concentration which refers to the ratio of the market value of the top ten domestic listed companies in a country to the total market value of the domestic listed companies in that country on innovation and technological progress. When the funds are excessively concentrated in large companies with a high concentration of stock market financing, emerging start-ups are difficult to obtain financing from the stock market, which may hinder a country's innovation and technological progress. Higher stock market financing concentration is found to have a negative impact on a country's innovation, reducing patent applications per capita and triadic patents per capita. The improvement of foreign trade openness and foreign direct investment (FDI) can effectively alleviate the negative effect of stock market financing concentration on innovation. The high concentration of stock market financing also hinders technological progress and has a negative effect on total factor productivity. Compared with low and middle-income countries, the negative impact of stock market financing concentration on innovation and technological progress is more significant for high-income countries. With the control of the influence of bank concentration, the stock market financing concentration is still significantly negatively correlated with innovation and technological progress; higher bank concentration will also have a negative impact on innovation and technological progress. Furthermore, the high concentration of stock market financing indicates that it is difficult for start-ups to obtain financing from the stock market, and thus the national entrepreneurial activity is hindered.#br#The results of this study show that the high concentration of stock market financing has a negative impact on innovation, technological progress and entrepreneurial activity, and this impact is more significant for high-income countries than low-income countries. Meanwhile in terms of providing financial support for corporate innovations, equity financing from the stock market is better than debt financing from the banking sector. With the economic development, China's financial system will gradually change from a bank-based financial system to a stock market-based financial system. Therefore, the capital allocation efficiency in the stock market deserves increasing attention.#br#This study focuses on the impact of a new measure of financial development, that is, the stock market financing concentration, on innovation and technological progress. It provides a new research perspective and enriches the study on financial development. Besides, the financing concentration of the stock market is a new indicator of micro financial structure that the previous literature of new structural finance theory has not paid attention to. Thus,it expands the theoretical framework of new structural finance. Future research can be conducted based on a longer sample period and more sample countries, and examine whether the impacts of stock market financing concentration on innovation and technological progress are various in different periods with the change of global macro environment.#br#
|
|
Received: 27 April 2022
|
|
|
|
|
|
[1] KING R G, LEVINE R. Finance and growth: schumpeter might be right[J]. The Quarterly Journal of Economics, 1993, 108 (3):717-738.
[2] BECK T,LEVINE R,LOAYZA N.Finance and the sources of growth[J]. Journal of Financial Economics, 2000, 58 (1):261-300.
[3] BECK T, LEVINE R. Stock markets, banks and growth: Panel evidence[J]. Journal of Banking and Finance, 2004, 28(3):423-442.
[4] LEVINE R, ZERVOS S. Stock markets, banks, and economic growth[J]. The American Economic Review, 1998, 88(3):537-558.
[5] ROUSSEAU P L,WACHTEL P.Equity markets and growth: cross-country evidence on timing and outcomes, 1980-1995[J]. Journal of Banking & Finance, 2000, 24(12):1933-1957.
[6] ZINGALES L.Presidential address:does finance benefit society[J]. Journal of Finance, 2015, 70(4):1327-1363.
[7] MERTON R C, BODIE Z. Design of financial systems: towards a synthesis of function and structure[J]. Journal of Investment Management, 2005, 3(1):1-23.
[8] RAJAN R G,ZINGALES L.Financial dependence and growth[J]. The American Economic Review, 1998, 88(3):559-586.
[9] RAJAN R, ZINGALES L. The great reversals: the politics of financial development in the 20th century[J]. Journal of Financial Economics, 2003, 69(1):5-50.
[10] 林毅夫,孙希芳,姜烨.经济发展中的最优金融结构理论初探[J].经济研究, 2009, 44(8):4-17.
[11] ZINGALES L. Towards a political theory of the firm[J]. Journal of Economic Perspectives, 2017, 31(3):113-130.
[12] DEMIRGUC-KUNT A,LEVINE R.Bank-based and market-based financial systems:cross-country comparisons[R].World Bank Policy Research Working Paper No. 2143, 1999.
[13] BROWN J R, PETERSEN F B C. Financing innovation and growth: cash flow, external equity, and the 1990s R&D boom[J]. Journal of Finance, 2009, 64(1):151-185.
[14] CETORELLI N, GAMBERA M. Banking market structure, financial dependence and growth: international evidence from industry data[J]. The Journal of Finance, 2001, 56(2):617-648.
[15] 蔡竞, 董艳. 银行业竞争与企业创新——来自中国工业企业的经验证据[J].金融研究, 2016, 58(11):96-111.
[16] 戴静, 杨筝，刘贯春, 等. 银行业竞争、创新资源配置和企业创新产出——基于中国工业企业的经验证据[J].金融研究, 2020, 62(2):51-70.
[17] HELPMAN E,GROSSMAN G M.Interest groups and trade policy[M]. Princeton:Princeton University Press, 2002.
[18] MORCK R,WOLFENZON D,YEUNG B.Corporate governance, economic entrenchment, and growth[J]. Journal of Economic Literature, 2005, 43(3):657-720.
[19] AGARWAL S, LUCCA D O, SERU A. Inconsistent regulators: evidence from banking[J]. Quarterly Journal of Economics, 2012, 129(2):889-938.
[20] GRULLON G, LARKIN, Y MICHAEL Y R. Are US industries becoming more concentrated[J]. Review of Finance, 2019, 23(4):697-743.
[21] FOGEL K, MORCK R, YEUNG B. Big business stability and economic growth: is what′s good for General Motors good for America[J]. Journal of Financial Economics, 2008, 89(1):83-108.
[22] SCHUMPETER J. The theory of economic development: an inquiry into profits, capital, credit, interest, and the business cycle[M]. Cambridge: Harvard University Press,1912.
[23] BAE K H, BAILEY W, KANG J. Why is stock market concentration bad for the economy[J]. Journal of Financial Economics, 2021, 140(1):436-459.
[24] GRILICHES Z. Issues in assessing the contribution of research and development to productivity growth[J]. Bell Journal of Financial Economics, 1979, 10(1):92-116.
[25] COHEN W M, LEVINTHAL D A. Absorptive capacity:a new perspective on learning and innovation[J]. Administrative Science Quarterly, 1990, 35(1):128-152.
[26] CREPON B, DUGUET E, MAIRESSE J. Research, innovation, and productivity: an econometric analysis at the firm level[J]. Economics of Innovation and New Technology, 1998, 7 (2):115-158.
[27] BAUMANN J, KRITIKOS A S. The link between R&D, innovation and productivity:are micro firms different[J]. Research Policy, 2016, 45(6):1263-1274.
[28] AGHION P, GRIFFITH R. Competition and growth reconciling theory and evidence[J]. Journal of Economics, 2007, 90(1):111-116.
[29] MOLL B. Productivity losses from financial frictions: can self-financing undo capital misallocation[J]. American Economic Review, 2014, 104(10):3186-3221.
[30] SUN H,EDZIAH B K,KPORSU A K.Energy efficiency: the role of technological innovation and knowledge spillover[J]. Technological Forecasting and Social Change, 2021, 167(6):1-14.
[31] GABAIXX. The granular origins of aggregate fluctuations[J].Econometrica, 2011, 79(3):733-772.
[32] BIJAPUR M. Granular uncertainty shocks[R]. London School of Economics, Working Paper, 2021.
[33] 林志帆,龙晓旋.金融结构与发展中国家的技术进步——基于新结构经济学视角的实证研究[J].经济学动态, 2015, 55(12):57-68.
[34] FARE R,GROSSKOPF S,NORRIS M. Productivity growth, technical progress, and efficiency change in industrialized countries[J]. American Economic Review, 1994, 84(1):66-83.
[35] 周开国,卢允之.金融结构与国家创新:来自OECD国家的证据[J].国际金融研究, 2019, 35(3):24-33.
[36] BERKES E G,PANIZZA U,ARCAND J L.Too much finance[R]. IMF Working Papers, 2012.
[37] SCHULARICK M,TAYLOR A.Credit booms gone bust: monetary policy, leverage cycles, and financial crises, 1870-2008[J]. American Economic Review, 2012, 102 (2):1029-1061.
[38] BREMUS F M. Cross-borderbanking,bankmarketstructures andmarketpower:theoryandcross-countryevidence[J]. Journal of Banking & Finance, 2015,50(1): 242-259.
[39] CLERCQ D D, DANIS W M, DAKHLI M. The moderating effect of institutional context on the relationship between associational activity and new business activity in emerging economies[J]. International Business Review, 2010, 19 (1):85-101.
[40] 田毕飞, 梅小芳, 杜雍, 等.外商直接投资对东道国国际创业的影响: 制度环境视角[J].中国工业经济, 2018, 35(5): 43-61.
[41] MANDEL E. An introduction to Marxist economic theory[M].New York: Pathfinder Press，1970.
|
|
|
|
