FINANCE, INNOVATION AND INDUSTRIAL-CHANGE

This paper investigates the impact financial structures upon industrial dynamics whenever the system is permanently characterized by unexploited opportunities for innovation, (highly) 'bounded' rationality and trial-and-error search processes. In these circumstances, it is argued, specific financial set-ups - such as 'market-based' vs. 'credit-based' mechanisms of allocation, control and ownership transfer - are likely to exert different influences on the rates and modes of industrial innovation. Relatedly, one suggests some hypotheses on the links between financial systems and features of industrial evolution, and some tentative taxonomies. © 1990.