7 - Fostering the ‘New Economy’: the role of financial intermediation

Wetenschappelijke publicatie
Publicatiedatum 1 juli 2001

In this paper we consider the financing issues of the New Economy, focusing on the role of financial intermediation. Although these issues have received little attention in the literature to date, their relevance is clear. First, financing is a precondition for New Economy activities to emerge. Second, some financing methods may be better suited than others to elicit the necessary entrepreneurial initiatives. In fact, these differences may help explain the more convincing evidence for the emergence of the New Economy in the US than in Europe and Japan. Third, especially in the case of substantial bank involvement, the financing structure of the New Economy may have implications for an economy’s financial stability.