Credit Depth, Government Intervention and Innovation in China: Evidence from the Provincial Data
This paper investigates the role of regional credit systems for Chinese regional innovation, using data for the period 2000-2008. Both the effects of credit depth and government intervention are investigated. Results show that regional credit depth has a significantly positive effect on regional innovation performance. Credit depth has more marked impacts on major innovations (i.e., invention patents) than on less complicated innovations (i.e., utility model and external design patents). Additionally, our results do not suggest a reduction in the efficiency of regional innovation from increased government intervention via state-owned commercial banks.