Financial Innovation in the UK
26 Pages Posted: 11 Sep 2008 Last revised: 25 Oct 2014
Date Written: July 1, 2008
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: Suggested Citation