scholarly journals Banking Regulations and Country’s Innovative Development: the Mediating Role of Financial Development

2020 ◽  
pp. 168-180
Author(s):  
Muslum Mursalov
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Financial Regulation ◽  
High Technology ◽  
Innovative Development ◽  
Innovation Development ◽  
Mediating Role ◽  
Banking Regulations ◽  
Global Innovation

Promoting innovation requires efficient financial regulations ensuring well-functioning financial markets that play critical roles in reducing financing costs, allocating scarce resources, evaluating innovative projects, and managing risks. The author indicated that rigorous empirical studies that link financial regulation and innovation development are sparse. Thus, this study aims to provide some empirical evidence on linking government interventions, particularly by banking regulations and supervision, and a country’s innovative growth from the perspective of the mediating role of financial development. Specifically, this paper demonstrates that the development of financial markets and financial institutions mediates the path between financial regulation and innovation development in Azerbaijan. The structural equation modeling technique using the statistical package PATH additionally to confirmatory factor analysis in STATISTICA was applied to analyze the data. Contrary to expectations, this study did not find a significant direct impact of changes in regulatory benchmarks related to total CAR and FX loans to total loans on Azerbaijan’s rank in the Global Innovation Index and the volumes of high-technology exports. One of the more significant findings to emerge from this study is that the government regulatory and supervisory interventions in the banking sphere are changing the imprudent financial institutions’ and markets’ behavior. Thereby it contributes to establishing a better developed and sound financial system in terms of their access, depth, and efficiency. Meanwhile, financial institutions’ and markets’ development contributes to the country’s innovative development. This combination of findings provides some support for the conceptual premise that reduction or elimination of government power in the financial markets and institutions leads to exacerbating systemic risk and destabilization of the financial system that could not build extensive innovation capacities to foster growth. Keywords: banking regulation and supervision, Global Innovation Index (GII), high-technology exports, financial institutions development, financial markets development.

scholarly journals ETHICAL FINANCE AS A SYSTEMIC CHALLENGE: RISK, CULTURE, AND STRUCTURE

2018 ◽  
Author(s):  
Saule T. Omarova
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Financial Regulation ◽  
Global Financial Crisis ◽  
Critical Role ◽  
Well Being ◽  
Structural Factors ◽  
Ethical Finance ◽  
Risk Culture

Cornell Journal of Law and Public Policy, Vol. 27, No. 3, p. 797, 2018In recent years, there has been no shortage of scandals involving fraudulent, predatory, and otherwise ethically unacceptable behavior on the part of large U.S. and non-U.S. financial institutions. Reverse redlining and targeting of racial minorities and other vulnerable segments of the population for subprime mortgages, collusive price-fixing in the world’s most important interbank lending and trading markets, and fraudulent creation of client accounts by bank employees pressured to generate fees for the bank are only some of the recent examples of such blatantly unethical behavior. Much of this behavior was also directly implicated in the generation of unsustainable levels of risk in the financial system, which led to the global financial crisis of 2008-2009.Not surprisingly, industry regulators and scholars of financial markets have been increasingly vocal in their criticisms of the financial industry’s systematic failure to maintain high ethical standards of business conduct. Much of the regulators’ and academics’ attention in this area is focused on individual financial institutions’ apparent inability to foster a strong internal culture of pursuing market objectives through ethical and socially responsible means. Accordingly, the potential remedy for this problem is often seen as a matter of improving the firms’ culture of risk-taking, so that they develop a genuine commitment to seek private gains without creating systemically destabilizing risks or otherwise endangering the well-being of their clients, creditors, and the rest of the society. In effect, this recent “ethics turn” in financial regulation recasts firms’ “risk culture” as a crucial determinant of success, or failure, of the post-crisis search for systemic financial stability.This Article analyzes the principal themes in the newly reinvigorated public debate on the role of ethical norms and cultural factors in financial markets and identifies its key conceptual and normative limitations. It argues that the principal flaw in that debate is that it tends to ignore the critical role of systemic, structural factors in shaping individual firms’ internal cultural norms and attitudes toward legitimate business conduct. Reversing the causality assumption underlying the current academic and policy discourse on institutional culture, the Article discusses how broader reform measures seeking to alter the fundamental structure and dynamics of the financial market--on a macro- rather than micro-level--would profoundly, and far more effectively, alter individuals’ and firms’ normative choices and attitudes. The key to making finance ethically sound, therefore, is to make it structurally sound – and to do so on a systemic level.

Collective action among rural poor

2019 ◽  
Vol 37 (1) ◽  
pp. 20-43
Author(s):  
George Okello Candiya Bongomin ◽  
John C. Munene ◽  
Joseph Mpeera Ntayi ◽  
Charles Akol Malinga
Keyword(s):  
Collective Action ◽  
Financial Institutions ◽  
Financial Intermediation ◽  
Financial Inclusion ◽  
Content Type ◽  
Mediating Role ◽  
The Poor ◽  
Bootstrap Approach ◽  
The Relationship

PurposeThe purpose of this paper is to establish the mediating role of collective action in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda.Design/methodology/approachThe paper uses structural equation modeling (SEM) through bootstrap approach constructed using analysis of moment structures to test for the mediating role of collective action in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda. Besides, the paper adopts Baron and Kenny’s (1986) approach to establish whether conditions for mediation by collective action exist.FindingsThe results revealed that collective action significantly mediates the relationship between financial intermediation and financial inclusion of the poor in rural Uganda. The findings further indicated that the mediated model had better model fit indices than the non-mediated model under SEM bootstrap. Furthermore, the results showed that both collective action and financial intermediation have significant and direct impacts on financial inclusion of the poor in rural Uganda. Therefore, the findings suggest that the presence of collective action boost financial intermediation for improved financial inclusion of the poor in rural Uganda.Research limitations/implicationsThe study used quantitative data collected through cross-sectional research design. Further studies through the use of interviews could be adopted in future. Methodologically, the study adopted use of SEM bootstrap approach to establish the mediating effect of collective action. However, it ignored the Sobel’s test and MedGraph methods. Future studies could adopt the use of alternative methods of Sobel’s test and MedGraph. Additionally, the study focused only on semi-formal financial institutions. Hence, further studies may consider the use of data collected from formal and informal institutions.Practical implicationsPolicy makers and managers of financial institutions should consider the role of collective action in promoting economic development, especially in developing countries. They should create structures and design financial services and products that promote collective action among the poor in rural Uganda.Originality/valueAlthough several scholars have articulated financial inclusion based on both the supply and demand side factors, this is the first study to test the mediating role of collective action in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda using SEM bootstrap approach. Theoretically, the study combines the role of collective action with financial intermediation to promote financial inclusion. Financial intermediation theory ignores the role played by collective action in the intermediation process between the surplus and deficit units.

Information Technology Capability, Knowledge Assets and Firm Innovation

2013 ◽  
pp. 169-188
Author(s):  
Avimanyu Datta
Keyword(s):  
Knowledge Networks ◽  
Future Research ◽  
Firm Level ◽  
Firm Innovation ◽  
Innovation Development ◽  
Knowledge Assets ◽  
Mediating Role ◽  
It Capability ◽  
Information Technology Capability

In this paper, the author presents a theoretical framework that establishes an indirect link between IT capabilities and firm innovation by characterizing the mediating role of knowledge assets: knowledge networks and knowledge capabilities. Firm innovation itself is characterized as innovation development and innovation commercialization. The search on literature of IT capability and innovation revealed a very lukewarm recognition towards firm level variables in knowledge networks, knowledge capabilities, and distinction between innovation development and commercialization. Backed up by detailed reviews of literature on innovation, strategy, and entrepreneurship, the author posits propositions linking the aforementioned constructs, and proposes a framework for future research linking IT Capability with Firm Innovation.

Transparency Regulation in Financial Markets – Moving into the Surveillance Age?

2011 ◽  
Vol 2 (3) ◽  
pp. 305-321
Author(s):  
Iris H-Y Chiu
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Financial Regulation ◽  
Global Financial Crisis ◽  
Financial Sector ◽  
Regulatory Control ◽  
Legal Reforms ◽  
The Global Financial Crisis ◽  
Risk Oversight

In the wake of the global financial crisis, the trajectory of legal reforms is likely to turn towards more transparency regulation. This article argues that transparency regulation will take on a new role of surveillance as intelligence and data mining expand in the wholesale financial sector, supporting the creation of designated systemic risk oversight regulators.The role of market discipline, which has been acknowledged to be weak leading up to the financial crisis, is likely to be eclipsed by a more technocratic governance in the financial sector. In this article, however, concerns are raised about the expansion of technocratic surveillance and whether financial sector participants would internalise the discipline of regulatory control. Certain endemic features of the financial sector will pose challenges for financial regulation even in the surveillance age.

scholarly journals Formal rural financial markets in Nigeria: An attractive or deceptive development alternative?

2000 ◽  
Vol 3 (3) ◽  
pp. 469-483
Author(s):  
Gabriel S. Umoh
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Agricultural Cooperative ◽  
Self Help ◽  
Rural Financial Markets

This paper uses the outreach paradigm to examine the role of two formal rural financial institutions (Nigerian Agricultural Cooperative Bank and People's Bank of Nigeria) in development financing in Nigeria. Findings show that the two institutions have fared relatively well in the outreach to their target clientele, except women. The paper also suggests that for wider outreach, effective linkage with rural self-help is necessary.

EU Law (MiFID II) and effective regulation: a step towards financial stability?

2019 ◽  
Vol 26 (6) ◽  
pp. 833-848
Author(s):  
Mariia Domina Repiquet
Keyword(s):  
Financial Markets ◽  
Financial Stability ◽  
Financial Regulation ◽  
Duty Of Care ◽  
Eu Law ◽  
Systemic Risks ◽  
Two Sides ◽  
The Eu

This article examines to what extent EU law is effective in preserving global financial stability and, therefore, preventing financial crisis. A difference between macro- and micro-approaches to financial regulation is explained. Whilst the former is concerned with the minimization of systemic risks and maintaining of the financial stability, the latter is focused on the effective regulation of all financial markets’ players, whatever the size of their portfolios. These approaches are the two sides of the same coin, that is limiting the possibility that future financial crises will occur. This paper argues that the effective regulation of investment firms, especially their duty of care, helps to preserve overall financial stability. The choice of the MiFID II as a case study is explained by its appreciation as one of the biggest achievements of EU policymakers in the context of financial law so far. How does a duty to ‘know your customer’ affect global financial stability within the EU? What is the role of soft law in preserving the financial system? These are the questions that this paper seeks to answer.

Information Technology Capability, Knowledge Assets and Firm Innovation

2011 ◽  
Vol 2 (3) ◽  
pp. 9-26 ◽  
Author(s):  
Avimanyu Datta
Keyword(s):  
Knowledge Networks ◽  
Future Research ◽  
Firm Level ◽  
Firm Innovation ◽  
Innovation Development ◽  
Knowledge Assets ◽  
Mediating Role ◽  
It Capability ◽  
Information Technology Capability

In this paper, the author presents a theoretical framework that establishes an indirect link between IT capabilities and firm innovation by characterizing the mediating role of knowledge assets: knowledge networks and knowledge capabilities. Firm innovation itself is characterized as innovation development and innovation commercialization. The search on literature of IT capability and innovation revealed a very lukewarm recognition towards firm level variables in knowledge networks, knowledge capabilities, and distinction between innovation development and commercialization. Backed up by detailed reviews of literature on innovation, strategy, and entrepreneurship, the author posits propositions linking the aforementioned constructs, and proposes a framework for future research linking IT Capability with Firm Innovation.

Financial Structure and Incentives

2012 ◽  
Vol 221 ◽  
pp. R23-R30
Author(s):  
Martin Čihák ◽  
Asli Demirgüç-Kunt
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Risk Taking ◽  
Global Financial Crisis ◽  
Financial Sector ◽  
Financial Systems ◽  
Regulatory Approach ◽  
Private Incentives ◽  
The Global Financial Crisis

The article connects two streams of recent research on the financial sector. The first is the regulation literature, which emphasises the central role of incentives in the financial sector. It points out that the challenge of financial sector regulation, highlighted by the global financial crisis, is to align private incentives with public interest without taxing or subsidising private risk-taking. The second stream of research relates to financial structures and examines the mix of financial institutions and financial markets in an economy. It finds that, as economies develop, services provided by financial markets become comparatively more important than those provided by banks. The article brings these two streams together, pointing out that — as financial systems develop from bank-based to market-based — a traditional regulatory approach that relies on banking ratios becomes less effective. There is thus a greater need for properly monitoring and addressing the underlying incentive weaknesses in market-based systems.

scholarly journals INTELLIGENT, INNOVATIVE AND SUSTAINABLE INDUSTRY IN BULGARIA – PROSPECTS AND CHALLENGES

2019 ◽  
Vol 1 ◽  
pp. 210
Author(s):  
Desislava Petrova
Keyword(s):  
High Technology ◽  
Organizational Structures ◽  
Sustainable Growth ◽  
Innovation Ecosystem ◽  
Innovation Development ◽  
Technology Center ◽  
Barriers To Innovation ◽  
European Policies ◽  
The Eu

The report analyzes industrial transfor-mation through smart and sustainable growth, as well as building a culture of innovation in a new digital age. Innovative enterprises from Bulgaria are presented with their respective modern organizational structures and forms of innovative cooperation between them - Sofia Techpark, Trakia Economic Zone, Technological Park at the Technical University of Gabrovo. The barriers to innovation development of SMEs in Bulgaria are outlined. An example of a high technology center funded under the EU Operational Programs is presented. Answers to questions such as: what are the role of the innovation centers in the innovation ecosystem in Bulgaria; how to stimulate the transfer of talent between university and business; how the market for innovation of the future changes; why de-literacy is a factor of success; how to support innovation and digitization; what are the European policies in the field of innovation and digitization?

scholarly journals Innovative development of Ukraine in the context of implementation of the association with EU

2020 ◽  
Keyword(s):  
Innovative Development ◽  
Innovation Development ◽  
Association Agreement ◽  
Global Competitiveness ◽  
Advantages And Disadvantages ◽  
Innovation Potential ◽  
Global Innovation ◽  
Global Competitiveness Index ◽  
Implementation Of Innovations ◽  
The Eu

The signing of the Association Agreement in 2014 provides for the development of innovation cooperation between Ukraine and the EU, so it is appropriate to analyze the development of innovation in Ukraine since the signing to assess the effectiveness of the agreement and identify weaknesses and strengths of Ukraine as an innovator and make appropriate recommendations. The object of the research of the article is the innovative development of country and accordingly the subject is the current state of the innovative development of Ukraine in the conditions of implementation of the Association agreement with Europen Union. The goal of the research is to determine the level of innovation development in Ukraine, highlight the main advantages and disadvantages and provide appropriate recommendations for improving the conditions of innovation development in the country in the framework of the Association Agreement. To achieve the goal of the the research analysis of the dynamics of indicators that characterize the level of innovation development in the country since the signing of the Agreement was conducted. The database is international rankings such as the Global Innovation Index, the Bloomberg Innovation Index, the Global Competitiveness Index and the EU Innovation Scoreboard. Results: based on the analysis of the dynamics of indicators of the level of innovation development in Ukraine, weaknesses that prevent Ukraine from realizing its innovation potential are identified and a correlation coefficient to assess the relationship between GDP per capita and the level of innovation development is calculated. Conclusions: despite the current Agreement between Ukraine and the EU, which should stimulate the development of technology in Ukraine, the level of innovative development in the country still remains low and lags far behind the level of EU states. Thus, Ukraine does not take full advantage of the Association Agreement. The given recommendations for increasing the level of innovation development in Ukraine based on european experience should help develop a strategy for the creation and implementation of innovations, find ways to increase the competitiveness of the Ukraine’s economy by implementation its innovation potential.

Sign in / Sign up

Export Citation Format

Share Document