Financial Innovation in the UK

26 Pages Posted: 11 Sep 2008 Last revised: 25 Oct 2014

See all articles by Shelagh Heffernan

Shelagh Heffernan

City University London - Sir John Cass Business School

Xiaolan Fu

University of Oxford

Maggie Fu

University of Macau - Faculty of Business Administration

Date Written: July 1, 2008

Abstract

This study employs a recent national survey of over 1100 British financial firms to ascertain the determinants of financial innovation and their sales success using Logit and generalised Tobit models. We find the likelihood of financial innovation rises with the size of financial firms, employee education, greater expenditure on research and development, the availability of finance, and the extent to which firms cooperate with each other. R&D, cooperation, and appropriability are the main variables driving the success of financial innovation, measured by the percentage share of innovations sold. Firms in London/the south have a significantly greater tendency to innovate, though Scotland also does well. Stock broking, fund management and related activities are more innovative than firms in the financial intermediation and pension/insurance sectors.

Keywords: Determinants/Success of financial innovation, ISCORE, UK financial

JEL Classification: G1, G19, G21, G22, G23

Suggested Citation

Heffernan, Shelagh A. and Fu, Xiaolan and Fu, Xiaoqing, Financial Innovation in the UK (July 1, 2008). Available at SSRN: https://ssrn.com/abstract=1266125 or http://dx.doi.org/10.2139/ssrn.1266125

Shelagh A. Heffernan (Contact Author)

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Xiaolan Fu

University of Oxford ( email )

3 Mansfield Road
Oxford, Oxfordshire OX1 3TB
United Kingdom

Xiaoqing Fu

University of Macau - Faculty of Business Administration ( email )

Macau
(853) 397-4747 (Phone)
(853) 838320 (Fax)

HOME PAGE: http://www.umac.mo/fba/staff/maggiefu.html

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