TY - JOUR
T1 - Access to Finance and Technological Innovation
T2 - Evidence from Pre-Civil War America
AU - Mao, Yifei
AU - Wang, Jessie Jiaxu
N1 - Publisher Copyright:
© The Author(s), 2022. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington.
PY - 2023/8/25
Y1 - 2023/8/25
N2 - This article provides new evidence on how access to finance affects technological innovation and establishes the role of labor practices in shaping this relation. We exploit a unique setting, pre-Civil War America, where staggered adoption of free banking laws across states encouraged bank entry, and variation in the use of exploited workers in agriculture generated differences in producers' demands for labor-saving technologies. Results show that access to finance spurred innovation; the positive effect on agricultural innovation diminished with labor exploitation. We establish the causal role of labor exploitation using the 1850s cholera pandemic and the influx of Irish immigrants.
AB - This article provides new evidence on how access to finance affects technological innovation and establishes the role of labor practices in shaping this relation. We exploit a unique setting, pre-Civil War America, where staggered adoption of free banking laws across states encouraged bank entry, and variation in the use of exploited workers in agriculture generated differences in producers' demands for labor-saving technologies. Results show that access to finance spurred innovation; the positive effect on agricultural innovation diminished with labor exploitation. We establish the causal role of labor exploitation using the 1850s cholera pandemic and the influx of Irish immigrants.
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U2 - 10.1017/S0022109022000795
DO - 10.1017/S0022109022000795
M3 - Article
AN - SCOPUS:85135453665
SN - 0022-1090
VL - 58
SP - 1973
EP - 2023
JO - Journal of Financial and Quantitative Analysis
JF - Journal of Financial and Quantitative Analysis
IS - 5
ER -