Does Credit Information Sharing Benefit Firm Innovation?

Fangfang Hou, Jeffrey Ng

Research output: Unpublished conference presentation (presented paper, abstract, poster)Conference presentation (not published in journal/proceeding/book)Academic researchpeer-review

Abstract

We investigate the effect of credit information sharing among lenders on borrowers’ innovation activities. Public credit registries play an important role in credit information sharing in many countries. Using the staggered introduction of public credit registries across different countries and an international firm-patent dataset, we find that credit information sharing is positively associated with firms’ innovation outcomes, especially in highly innovative sectors and industries that depend on external financing. This finding is consistent with the notion that the institutional features that reduce information asymmetry between firms and their creditors can promote firms’ success by easing financing frictions. We find that the positive effect is more pronounced among more opaque firms, firms in economies with more powerful contract enforcement, and firms in jurisdictions with stronger legal protections. Overall, these findings highlight an important real effect of credit information sharing: enabling firms to be more innovative by improving lenders’ information set.
Original languageEnglish
Pages1
Number of pages62
Publication statusNot published / presented only - 12 Aug 2020
EventAmerican Accounting Association (AAA) Annual Meeting - Virtual Meeting, United States
Duration: 10 Aug 202013 Aug 2020
https://aaahq.org/Meetings/2020/Annual-Meeting

Competition

CompetitionAmerican Accounting Association (AAA) Annual Meeting
Country/TerritoryUnited States
Period10/08/2013/08/20
Internet address

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