Finance and Innovation System or Chaos

The current document talks about a significant part of the framework conditions for innovation in several European countries (France, Italy, Spain, the Netherlands, the United Kingdom) also Japan and the United States by way of a comparison of the development of the financial systems in these countries. The main objective is whether a convergence could be observed between what’s traditionally regarded as market based and credit based systems respectively. According to quantitative statistics it’s determined that a convergence has taken place, and it’s getting increasingly harder to split national financial systems into 2 main categories based on quantitative data alone. However disparities still remain, and the document continues by talking about causes of convergence and divergence respectively. These reasons comprise internationalization, differences in industrial structure, and also changes in national and international regulation. Prior to turning to a discussion of the policy perspectives of the observed development the report talks about the financial systems capability to finance various kinds of transactions….

Contents: Finance and Innovation System or Chaos

1. Financing Innovations the Role of the Institutional Set-Up
2. A Picture of Financial Systems
2.1 The Importance of Debt and Bank Credits in Financing Firms
2.2 Equity Markets
2.3 Integration and Internationalisation
2.4 Differences still persist
3. Explaining the Differences
3.1 Reasons for Convergence
3.2 The Origin of Financial Systems, Reasons for Divergence and Room for Policies . 15
3.3 Regulation of Financial Systems
4. Complicating the Picture – Getting Down to Micro
4.1. Introduction
4.2. A Micro-View on Financing Different Transactions
5. Conclusions and Policy Perspectives
References .

Source: Copenhagen Business School

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Finance and Innovation System or Chaos