Innovation by creative destruction causes structural change. Banks and capital markets must reallocate credit and risk capital from firms with low profitability and downsizing sectors to fast growing innovative companies in expanding industries. Find more information including a Video on the scientific workshop organized jointly with CEPR here. The Keynote Lectures are published in the special issue of the Swiss Journal of Economics and Statistics, available here.
Financing the Green Transformation
The role of finance is key to an efficient green transformation, needing a large-scale reallocation of capital and labour. Learn more in the article and on the platform Open Access Government.
From Basic Research to Private Innovation
What’s the return on basic research spending? What can policy makers do to make basic research more valuable, beyond simply spending more taxpayer money? And what role will private innovation have? Read the article on Open Access Government.
The Role of Finance in Creative Destruction
Innovation drives growth but creative destruction can raise productivity only if capital and labour are reallocated. Learn more about the role of venture capitalists, private equity and banks in the article and on the platform.
Financing Recovery and Growth
Credit reallocation of banks boosts innovation and growth by steering capital to more productive use. Read the article on the platform Open Access Government.
Banks and Creative Destruction in the Modern Economy
Banks play a crucial role in financing the European business sector, extending loans to profitable companies to fund productive activities, while also withdrawing credit from less well performing firms. Read the article about a WPZ research project on banking and innovative growth.
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Trade and innovation: The Schumpeterian role of Banks
Christian Keuschnigg and Michael Kogler, University of St. Gallen and WPZ
Only strong banks can fulfil their Schumpeterian role by efficiently reallocating credit from declining to expanding firms. An efficient banking sector thereby magnifies the gains from trade liberalisation by easing the process of capital reallocation.
VoxEU, 04.03.2019
The heterogeneous tax sensitivity of firm-level investments: European evidence
Peter Egger and Katharina Erhardt, ETH-Zürich, and Christian Keuschnigg, University of St. Gallen
The impact of corporate taxation is up to 70% higher for entrepreneurial firms than for managerial ones. Policy should provide targeted tax relief to the most constrained firms, where taxes are most harmful, if other policies are unsuccessful in improving access to external funds.
VoxEU, 25.02.2019
Moving to the Innovation Frontier
Christian Keuschnigg, University of St. Gallen and WPZ
Innovation drives growth, determines the competitive position of firms, and leads to factor reallocation. Firms must implement more risky innovations as the economy approaches the technological frontier. Priority should be given to research, selection of firms, and reducing frictions.
VoxEU, 22.03.2016