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| Financing Science and Technology: A Conceptual Framework Based on the Power of Technological Trajectory Perspective |
| Cheng Ying;Zhang Shuo;Liu Wei |
| School of Economics and Management Chongqing University |
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Abstract This paper investigates the role of finance in facilitating industry and economic development. An industry technology development-centered framework is established to analyze the function of finance in driving the development of technological innovation that triggers the new wave of economic development. It makes a classification of finance based on the financial demands of technologies which are at different development stages. It is found that government-led capitals and financial institutions are more important at the early stage of industry technological trajectory (ITT) development. When the ITT becomes more and more powerful, the market-oriented capitals and financial institutions become more active. However, when ITT becomes powerful and markets are mature with low risks and steady return of investment, the planning role of the governments' policies becomes more significant again. Through historical analysis of the development of ITTs and financial structures in four innovative countries, the paper demonstrates the theoretical framework and the relevant policy implications are discussed.
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Received: 27 July 2015
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