Setting off from an Evolutionary perspective, this paper debates key aspects of the process of financing innovation based on Keynes's asset choice model within the context of Minsky's cycle and the Institutionalist approach of Veblen. Innovative activity is surrounded by great uncertainty because firms invest funds for the long term without being sure whether they will earn high returns. As a result, firms run into additional obstacles when trying to obtain financing to develop new technologies. This difference becomes clearer when developed countries (USA) and less-developed countries (Brazil) are compared. The higher the level of uncertainty in world markets, the lower the amount of funds available to finance innovation; and this situation is accentuated in less-developed countries because they do not have a mature financial system capable of supporting innovation risks.
This paper identifies changes in the center-periphery structure due to transformations in capitalism since 1970. In its new configuration, capitalism not only altered center-periphery relations but also exerted impact upon peripheral units that affect the system structure itself. This paper aims to apply Ruggie’s famous critique of Waltz in International Relations to analyse global capitalism and show how the changes in the center-periphery cleavage is affecting its systemic reconfiguration in the 21st century. This research identifies the boomerang effect as a new systemic element, that is, as a byproduct of the interaction of units of the global capitalist system in the 21st century.
This article discusses the financing of innovation based on the evolutionary theory. The goal is to bring together elements that elucidate a firm's behavior towards the innovation process. These elements include technological regimes and the relationship between finance and innovation. The discussion goes further into the evolutionary theory by incorporating the stages of growth of an innovative firm and the preference of innovation funding sources. The conclusion is that for each technological pattern and at each stage of development, a firm tends to present a different type of behavior in seeking financing for innovation.
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