Bank Distress and Innovation

What effect does bank distress have on innovation? This is an important question for economies which are still suffering the effects of the 2008 banking crash. At last week's QUCEH workshop, Tom Nicholas of Harvard Business School presented a paper which examined the effect of bank failures during the Great Depression on innovation. Using firm-level patent records, he and his co-author find that bank distress had a significant negative impact on the level, quality and trajectory of firm-level innovation. Tom's paper is available here.  

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