We assess how financial development affects innovation. For this purpose, we employ a unique Research Quotient data set from 1980 to 2018, and observe significant inverted-U effects of financial development on innovation for equity and credit markets. Specifically, the effects of the markets are sector-specific, implying that the inverted-U effect of the equity market on innovation is mainly driven by its diminishing effect on innovation in high-technology industries, while credit markets mostly affect innovation in non-high-technology industries. Regarding the mechanism, we posit that the inverted-U shape between finance and innovation may be explained by the disproportionate funds allocation-induced market concentration.

中文翻译：

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金融发展与创新：市场结构的作用*

我们评估金融发展如何影响创新。为此，我们采用了 1980 年至 2018 年独特的研究商数数据集，并观察了金融发展对股权和信贷市场创新的显着倒 U 效应。具体而言，市场的影响是针对特定部门的，这意味着股票市场对创新的倒U型效应主要是由其对高科技行业创新的影响递减驱动的，而信贷市场主要影响非高科技行业的创新。 ——科技产业。关于机制，我们认为金融与创新之间的倒U形可能是由资金配置不成比例导致的市场集中度来解释的。