|Title:||Does credit information sharing benefit firm innovation?|
|Subject:||Hong Kong Polytechnic University -- Dissertations|
Credit -- Management
|Department:||School of Accounting and Finance|
|Pages:||x, 112 pages : color illustrations|
|Abstract:||Credit information sharing plays an important role in mitigating information asymmetry between borrowers and (potential) lenders. In my dissertation, I use international patent data to investigate whether and how credit information sharing among lenders affects borrowers' innovation activities, and whether this effect varies across firm-specific characteristics and institution-level features. Using a difference-in-differences framework based on a novel firm-patent panel dataset from 30 countries, I find that credit information sharing through the introduction of public credit registries (PCRs) is positively associated with firms' innovation outcomes. This positive effect derives from credit information sharing's implicit contracting role in lowering firms' overall cost of credit and facilitating their innovation efficiency. My difference-in-differences test results are robust to alternative measures, various specifications and controlling for other concurrent economic reforms. Cross-sectionally, I find the positive effect of credit information sharing on innovation is more pronounced among firms dependent on external finance, suggesting the importance of credit information sharing in facilitating credit allocation. I also find that firms from economies with more power in enforcing contracts, and/or less concentrated banking system enjoy better innovation outcomes after the introduction of PCRs, which shed light on the monitoring role of information sharing. In addition, the positive effect is stronger among less transparent firms, emphasizing PCRs' important role in improving lenders' information set. Overall, these findings are consistent with the idea that credit information sharing leads to better financing opportunities for borrowers and enhances their innovation portfolios by improving lenders' information set.|
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