Banking and Innovation: Evidence from the Industrial Revolution

15:40-17:00, Thursday, October 30, 2025

I-206, Boxue Building

Dr. Jinlin Wei is now an assistant professor at the Division of Social Science, HKUST. He holds a PhD in Economics from the Department of Economics, University of Warwick, an M.A. in Economics, a B.Sc. in Physics, and a B.A. in Economics from Peking University. He also visited Northwestern University as a visiting scholar. He seeks to understand economic development in history from a spatial perspective. His research interests include economic history of China, Britain, and South Asia. He has his paper published in the Journal of Development Economics.

How did banks affect innovation in England and Wales between 1750 and 1825? Using a new district-level panel dataset on patents and banks, I find that better access to banking services increased patenting. My baseline estimation, which includes district and year fixed effects, shows that a one-standard deviation increase in banking access increased patenting by 15.6% of a standard deviation. I establish a causal relationship by constructing instrumental variables that utilize shocks to the money supply and the locations of historical post towns to predict the growth of country banks. My findings suggest that banks formed a national financial market that channeled surplus funds from rural districts to industrial areas that lacked credit. Banks increased patents acquired by industrialists and merchants by lowering the costs of procuring working capital. The effects of banks were larger in districts subject to tighter credit constraints and lacked access to the London money market.

For more information of the seminar, scan the following QR code(s) to join Tencent QQ group (904 544 292) or WeChat group named "IAER Seminar (4)", please.

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(QR code is valid until November 3, 2025)