Financial Innovation, Stock Market Development, and Economic Growth: An Application of ARDL Model

Qamruzzaman,; Jiang, Wei

doi:10.3390/ijfs6030069

Cited by 68 publications

(54 citation statements)

References 98 publications

(115 reference statements)

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“…However, a group of researchers put their considerable efforts of establishing the nexus financial innovation-led economic growths and produced substantial evidence in favor of a positive association between economic growth and financial innovation see, for example (Qamruzzaman and Wei 2017, 2018a, 2018cLaeven et al 2014Laeven et al , 2015Michalopoulos et al 2009Michalopoulos et al , 2011Bara and Mudxingiri 2016;. They argue that financial innovation expands economic activities through capital accumulation, efficient financial intermediation, and financial institutional development.…”

Section: A Financial Innovation and Its Role Understanding From The mentioning

confidence: 99%

“…The technical innovation, according to Schumpeter (1911), critically important for economic growth but the effects of fiscal and financial innovation on economy receive little attention in empirical investigation. However, recent period financial innovation and its potential impact has attracted immense interest among researchers and encourages further investigation by considering the various aspect of the economy such as the economic growth (Qamruzzaman and Wei 2017, 2018b, 2018c; Bara and Mudxingiri 2016), on firms performance (Muthinja and Chipeta 2018;Carbó Valverde et al 2016), on money demand (Dunne and Kasekende 2018;Kasekende 2016), on banking sector growth (Chipeta and Muthinja 2018;Kamau and Oluoch 2016), and many more. Financial innovation tends to accelerate the financial development allowing investment diversifications and risk minimization and thus plays a decisive role in economic growth (Bhatt and Mundial 1989).…”

Section: Introductionmentioning

confidence: 99%

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Financial Innovation and Financial Inclusion Nexus in South Asian Countries: Evidence from Symmetric and Asymmetric Panel Investigation

Qamruzzaman

Jiang

2019

IJFS

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This paper examines the nexus between financial inclusion and financial innovation while incorporating financial development and remittance inflows in the case of six South Asian countries—Bangladesh, India, Pakistan, Nepal, Bhutan, and Srilanka—by employing the panel autoregressive distributed lagged model under a linear and nonlinear framework using monthly data over the period 1990M1–2018M12. Further, a Granger-causality test with System GMM specification was performed for assessing directional causality. The study findings from Panel ARDL confirmed the positive association between financial innovation and financial inclusion, which was observed both in the long run and short-run. Considering the nonlinearity in the estimation, the standard Wald test confirms the existence of an asymmetric relationship both in the short-run and in long run horizon regarding causality test results. The study findings support the feedback hypothesis that the presence of bidirectional causality between the financial innovation and financial inclusion is both in the short-run and long run. Since the study findings established a critical relationship between financial innovation and financial inclusion, therefore effective policy guidelines are suggested so that the contribution from financial inclusion and financial innovation can assist in developing a vibrant financial sector.

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Section: A Financial Innovation and Its Role Understanding From The mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Financial Innovation and Financial Inclusion Nexus in South Asian Countries: Evidence from Symmetric and Asymmetric Panel Investigation

Qamruzzaman

Jiang

2019

IJFS

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“…The fifth control variable of this study is gross capital formation (GCF) as a percentage of GDP, with proxy of investment in the economy. (Biplob & Halder 2018;Qamruzzaman & Wei 2018). According to World Bank (2018), GCF refers to the change in the level of fixed asset and inventories in the economy.…”

Section: Data Description and Sourcesmentioning

confidence: 99%

“…2015, Chaitip et al 2015Biplob & Halder 2018;Qamruzzaman & Wei 2018). The Monetarists Claim that monetary policy influences prices, but not economic growth or unemployment while Keynesians, with an efficient monetary policy, believe that changes in money supply cause to change in real GDP and prices.…”

mentioning

confidence: 99%

Does Budget Deficit Impede Economic Growth? Evidence from Bangladesh

Biplob¹

2019

JOMEINO

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The purpose of this study is to investigate the impacts of budget deficit on economic growth in Bangladesh over the period of 1981-2017. This study employed the autoregressive distributed lag (ARDL) model to capture long-run cointegration along with longrun and short-run elasticity of the explanatory variables. Moreover, directional causalities between the variables used in this study have been checked using vector error correction model (VECM). The results of the analysis under ARDL model revealed that in case of Bangladesh, budget deficit positively affects economic growth both in long-run and short-run while government total expenditures lead to increase GDP only in long-run. These findings support the Keynesian proposition that budget deficits crowd-in private investments resulting economic growth. Furthermore, directional causality tests conducted using VECM explored unidirectional causality running from budget deficit to economic growth while feedback causality has been found between governments total expenditures and economic growth. For policy implications, this research provides evidence that in an emerging economy like Bangladesh, government spending through deficit financing can drive positively in the level of economic growth. Bangladesh, however, should not have the luxury of forgetting about the bad consequences of consistent and gradually increasing budget deficit at all.

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“…Stock markets of different countries are increasingly included in integration processes and become interdependent. This is facilitated by the development of economic relations and modern financial technologies, while stock markets have a significant impact on the economic growth of developed countries as well as (Chancharat, 2009;Koirala, 2011;Wei, 2018). The state of the world's financial markets has a significant impact on the status of individual national economies, especially if these economies are small in size and with a high degree of openness to global financial flows.…”

Section: Introductionmentioning

confidence: 99%

The Relationship Between World and Local Stock Indices

Blahun¹

2020

Montenegrin Journal of Economics

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The article presents the results of the study on the impact of stock indices of world exchange on the indices of local exchanges through the example of the Ukrainian stock index. The purpose of the article was to confirm the hypothesis of the existing influence of the indexes of world stock exchanges on the indices of local stock exchanges. Time series of Standard & Poor's Global Ratings, NIKKEI 225, FTSE, DAX, WIG and PFTS stock indices were used for the study for the period from 2010 to 2017. On the basis of the analysis of the parameters of descriptive statistics, the relationship between the indicated indices with different levels of narrowness was determined. Using the Sharpe model, the absolute risk of the PFTS index was determined as the sum of specific and systematic risks. To test the time series for stationary, the expanded Dickie-Fuller test and the Phillips-Perron test were used. It has been determined that the analysed time series are the rows characterized by non-stationary and random roaming series, while the S & P index has the most powerful trend, and WIG and FTSE have weaker trends. The hypothesis was put forward about the fact that world exchanges form the conjuncture on local exchanges, in particular Ukrainian exchange, which is confirmed by the results of the Granger causality test, as well as by cointegration tests.

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Financial Innovation, Stock Market Development, and Economic Growth: An Application of ARDL Model

Cited by 68 publications

References 98 publications

Financial Innovation and Financial Inclusion Nexus in South Asian Countries: Evidence from Symmetric and Asymmetric Panel Investigation

Financial Innovation and Financial Inclusion Nexus in South Asian Countries: Evidence from Symmetric and Asymmetric Panel Investigation

Does Budget Deficit Impede Economic Growth? Evidence from Bangladesh

The Relationship Between World and Local Stock Indices

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