Did Bank Distress Stifle Innovation During the Great Depression? / Ramana Nanda, Tom Nicholas.

Format:

Book

Author/Creator:

Nanda, Ramana.

Contributor:

National Bureau of Economic Research.

Nicholas, Tom.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20392.

NBER working paper series no. w20392

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

We find a negative relationship between bank distress and the level, quality and trajectory of firm-level innovation during the Great Depression, particularly for R&D firms operating in capital intensive industries. However, we also show that because a sufficient number of R&D intensive firms were located in counties with lower levels of bank distress, or were operating in less capital intensive industries, the negative effects were mitigated in aggregate. Although Depression era bank distress was associated with the stifling of innovation, our results also help to explain why technological development was still robust following one of the largest shocks in the history of the U.S. banking system.

Notes:

Print version record

August 2014.