Financial innovations and US economic growth

Author(s):  
Petr Patron ◽  
Natalia Torianik
2014 ◽  
Vol 5 (1) ◽  
pp. 30-51 ◽  
Author(s):  
Anthony Adu-Asare Idun ◽  
Anthony Q.Q. Aboagye

Purpose – This paper takes the finance-growth nexus further by looking at the relationship between bank competition, financial innovations and economic growth in Ghana. The purpose of this paper is to find the causality among bank competition, financial innovations and economic growth in Ghana. Design/methodology/approach – The relationship between bank competition, financial innovations and economic growth was established through the framework of the endogenous growth model. In addition, the paper employed the bound testing ARDL cointegration procedures to enable us to establish both short-run and long-run relationship between bank competition, financial innovations and economic growth. Granger causality test were also estimated to determine the direction of causality. Findings – The results showed that, in the long run, bank competition is positively related to economic growth while financial innovation is negatively related to economic growth. In the short run, bank competition is negatively related to economic growth. By the same token, financial innovation is positively related to economic growth in the short run. In terms of causality, the results showed that there is unidirectional Granger causality from bank competition to economic growth. However, there is bidirectional Granger causality between financial innovation and economic growth. Practical implications – The study therefore, recommends for more regulations toward a more competitive banking system with more innovative products tailored toward mobilization of savings and investment to growth induced sectors of the economy. Originality/value – This paper provides a time series perspective to the finance-growth nexus and highlights the potential contribution of effective banking development to the economic welfare of the Ghanaian citizens.


2021 ◽  

The contemporary economic environment is in most segments quite different than it was even two decades ago. Globalization, development of new technologies, especial in the IT sector, financial innovations, repositioning of economic powers, and new business models are only a few of many new realities. Although all listed brought numerous new possibilities and continuous economic growth, we cannot neglect the increased risks and perils of contemporary economic reality. Uncertainty and adaptation have become a mantra in the life of entrepreneurs, governments, and institutions. Through eight chapters of this monograph, different experts, researchers and scholars try to enlight contemporary economic environment from a different perspective, either from the perspective of entrepreneur, financial industry, governments or average consumer and participant in the modern economy that was very promising only a few decades ago, but more uncertain and dangerous than ever, in the present.


2021 ◽  
Vol 18 (4) ◽  
pp. 203-212
Author(s):  
Yuliia Shapoval

The intrinsic property of modern economic development is financial deepening in the light of incremental spearheading financial innovation opportunities. The paper deals with the relationship between financial depth, financial innovation, and economic growth among 22 OECD economies over 2007–2018 by applying pooled OLS and fixed effect panel data regression analysis. The purpose of the paper is to empirically test whether the economic growth depends on financial depth, financial innovation, and institutional environment (Worldwide Governance Indicators). The findings shed light on the recent discussion on the pros and cons of financial innovation. The estimation results show that while financial depth is a strong predictor of economic growth across high- and upper-middle-income economies, financial innovation is a slightly weaker predictor. Despite the identified positive impact of financial innovation on economic growth, it is asserted that the negative effect of financial depth may indicate oversaturated financial market in developed countries. Сonsistent with the general notion that the institutional framework promotes the capacity of the financial sector for financial innovations implementation, this paper states that financial depth and financial innovations are better prerequisites of economic growth than institutional development. AcknowledgmentThe paper was funded as a part of the “Relationship between financial depth and economic growth in Ukraine” research project (No. 0121U110766), conducted in the State Institution “Institute for Economics and Forecasting of the NAS of Ukraine”.


2020 ◽  
Vol 9 (34) ◽  
pp. 34-43
Author(s):  
Safdar Ali ◽  
Khalil Ahmad ◽  
Muhammad Shahid

The economic status of a country plays an important role in the lives of the citizens of both developed and developing countries. With the rapid increase in population, every country is trying to find new ways to boost its growth rate so that it may elicit the maximum number of people from poverty and can compare other countries in the form of improvement. The main objective of the study is to empirically investigate the impact of political stability and financial innovations on economic growth. Furthermore, the study also analyzes the impact of subsectors (Agricultural, Industry, and Services) of the economy on growth. A time-series co-integration autoregressive distributed lag (ARDL) model is used to investigate the general to specific sector's growth. The key empirical finding shows that political stability and financial development has a positive and significant impact on economic growth as well as its sub-sectors in the long-run. Trade liberalization has a positive impact on economic growth but most surprising results have been witnessed in agriculture growth for Pakistan.


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