I propose a theoretical framework to study jointly the process of innovation and asset pricing properties of investment … in innovation. The model emphasizes the disruptive nature of new technologies. When risk-sharing is limited, this feature … gives rise to hedging motives against potential disruption. Investors' hedging activity increases the pace of innovation and …

productivity (TFP) growth in China. Our primary goal is to test Hicks' induced innovation hypothesis by examining whether technical … find that not only is wage-induced innovation significant and quantitatively important, but also that it substantially … is predominantly driven by wage-induced innovation along with massive injection of heavily subsidized physical inputs in …