Abstract
The paper uses data from 104 developing countries varying from 2010 to 2019 period to examine the effect of credit access on firm innovation. The paper first regressed the model with full sample, then with sub-sample by size, legality and bribery to check the moderation effect of bargaining power and bribery. The findings of the regression analysis demonstrate a favorable relationship between corporate innovation and loan access. For companies with higher negotiating strength (proxies by firm size and legality), this effect becomes more significant. However, the influence of financial availability on corporate innovation is likely to be hampered by the perception of bribery. Finally, the paper brought some policy implications to the paper, especially for developing countries.
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