Financial innovation and economic growth in the SADC

Bara, Alex; Mugano, Gift; Roux, Pierre Le

doi:10.1080/20421338.2016.1226705

Cited by 33 publications

(36 citation statements)

References 37 publications

(17 reference statements)

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“…A shock in shadow banking also induce an increase in GDP, a finding in tandem with the Granger causality tests above, which established a uni-directional relationship between GDP and shadow banking flowing from shadow banking. The results supports literature on financial innovation and economic growth, which suggests that financial innovation increases economic growth (Bara et al, 2016, Beck et al, 2014, Laeven et al, 2015. Figure 3 shows results of the response to a shock in the policy rate.…”

Section: Pvar Lag Order Selectionsupporting

confidence: 83%

Shadow Banking, Bank Liquidity and Monetary Policy Shocks in Emerging Countries: A Panel VAR Approach

Zhou¹

2020

JEBS

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The study provides an analysis of the relationships between monetary policy, shadow banking and bank liquidity in emerging market economies. It is aimed at broadening knowledge on the effect of shadow banking on monetary policy transmission. Furthermore, the study seeks to analyze the impact of changes in bank liquidity on the growth of the shadow banking sector. We employ panel VAR technique to analyse the dynamics of monetary policy, shadow banking and bank liquidity using data for 15 emerging economy countries. A contractionary monetary policy shock results in a decrease in shadow banking and a decrease in bank liquidity. We also find that a positive shock in bank liquidity increases shadow bank growth and a positive shock in shadow banking also increases bank liquidity. The results point to complementarity between shadow banking and bank liquidity; and the interconnectedness between the two markets in emerging economies. We suggest continuous monitoring of shadow banking activities to minimize transmission of risk from the shadow banking system into the banking sector.

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Section: Pvar Lag Order Selectionsupporting

confidence: 83%

Shadow Banking, Bank Liquidity and Monetary Policy Shocks in Emerging Countries: A Panel VAR Approach

Zhou¹

2020

JEBS

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“…Growth economic theory predicts that capital adequacy will positively influence economic growth, and so we assigned this variable a positive sign for its coefficient. Using the approach found in Bakang (2016), the second proxy for financial innovation was defined as the Broad-to-Narrow Money (M2/M1) (Laeven et al 2015;Bara and Mudxingiri 2016;Bara et al 2016;Ansong et al 2011). The other macroeconomic variables we used were the Gross Capital Formation (GCF) and Trade Openness (TO), which were both expected to have a positive coefficient, implying a positive impact on economic growth.…”

Section: Variable and Sourcesmentioning

confidence: 99%

“…To test the model, Laeven et al (2015), Bara and Mudxingiri (2016), and Bara et al (2016) extended the AHM model to incorporate financial innovation with financial development. All of the researchers emphasized financial innovation.…”

Section: Phillips-perron Unit Root Testsmentioning

confidence: 99%

“…We selected the real GDP per capita as the economic growth indicator, which is widely used by researchers (Bara et al 2016;Bara and Mudxingiri 2016;Ajide 2015;Cavenaile et al 2011;Ndlovu 2013;Sabandi and Noviani 2015;Mwinzi 2014). If any country experienced an increasing trend in its GDP per capita over the selected time period, we assumed that that economy was growing.…”

Section: Variable and Sourcesmentioning

confidence: 99%

“…In their models, they assumed that the financial development that occurs in any period is the impact of previous financial innovations. Bara et al (2016) derived the following model from the AHM framework:…”

Section: Phillips-perron Unit Root Testsmentioning

confidence: 99%

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Financial innovation and economic growth in Bangladesh

Qamruzzaman

Jiang

2017

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Financial innovation and banks performance in developing countries: Evidence from Ghana

Nyamekye,

Okyere,

Owusu‐Ansah

et al. 2023

Bus Strat Dev

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Increase in the diffusion of information communication technology in Africa has resulted in the increase of technology‐based financial products and processes. The rollout of financially innovative products and processes is being undertaken on both the macro level (by regulators and government agencies) and the micro level (banking institutions). To determine whether or not this capital‐intensive investment is worthwhile or otherwise, the study collected firm‐level data on banks operating in Ghana, West Africa, to examine the relationship between financial innovation indicators and bank performance. Using a quantitative design, the study employs panel regression to analyse a panel data of 21 banks (both local and foreign‐owned). operating in Ghana between 2007 and 2015 The results show that financial innovation, proxied by two industrywide interventions, has a positive and significant impact on bank performance. It is recommended that deposit‐taking institutions in developing countries invest in financial innovative services to increase their performance. On the macro level, governments and banking industry regulators in Africa are encouraged to invest in creating and supporting the proliferation of technology‐based systems that will improve banking processes.

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Financial innovation and economic growth in the SADC

Abstract: The views expressed are those of the author(s) and do not necessarily represent those of the funder, ERSA or the author's affiliated institution(s). ERSA shall not be liable to any person for inaccurate information or opinions contained herein.

Cited by 33 publications

References 37 publications

Shadow Banking, Bank Liquidity and Monetary Policy Shocks in Emerging Countries: A Panel VAR Approach

Shadow Banking, Bank Liquidity and Monetary Policy Shocks in Emerging Countries: A Panel VAR Approach

Financial innovation and economic growth in Bangladesh

Financial innovation and banks performance in developing countries: Evidence from Ghana

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