Financial Market and Innovation

Hartmut Hirsch-Kreinsen
TU Dortmund

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     Last modified: February 17, 2010

Abstract
This contribution addresses the relationship between technological innovation and finance. The financial market must be regarded as one of the fundamental prerequisite of innovation, inasmuch as it is here that decisions are made on capital allocation to enterprises. Firstly, it is asked which interdependencies can be detected between the institutionalised conditions of the financial market and the innovation strategies pursued by the enterprises? Secondly, it is asked which country-specific patterns of interdependencies can be distinguished? Thirdly, the consequences of the recently observable internationalisation of the financial market and of corporate financing in countries with so-called Coordinated Market Economies such as Germany are discussed and, finally, first thoughts on the repercussions of the international credit crunch on innovations will be presented. The paper is based on an extensive literature research in the fields of economic sociology and innovation studies and the analysis of the public debate on the prospects of the current economic development.