Mainstream Versus Heterodox View on Financial Innovation

Janíčko, Martin

doi:10.1016/s2212-5671(15)01302-7

Cited by 4 publications

(5 citation statements)

References 7 publications

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“…While theoretical research on financial innovation primarily identifies positive consequences, demonstrating its role in reducing moral hazard, improving intermediation, and increasing liquidity in the market, empirical research, primarily conducted via case study, presents a mixed bag (Janicko, 2015). In the following sections, we review evidence for the effects of venture capital and securitization, which have frequently been used as proxies for financial innovation.…”

Section: Effects Of Financial Innovationmentioning

confidence: 99%

“…Securitized products generally consist of debt obligations, issued either to household or businesses, which are packaged together and sold as a single instrument for risk dispersion, which often leads to their use as a proxy for financial innovation (Janicko, 2015). Securitization represents a highly efficient intermediation product between savers and borrowers, resulting in a decreased cost of capital (Calbo-Valverde, 2015;Nadauld and Weisbach, 2012), and facilitating household access to credit (Lerner and Tufano, 2011).…”

Section: Securitizationmentioning

confidence: 99%

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Financial innovation, economic growth, and the consequences of macroprudential policies

Bernier

Plouffe

2019

Research in Economics

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We leverage a 'catch-all' measure of financial innovation-research and development spending in the financial sector-to assess the net relationship between financial innovation and economic growth and evaluate the influence of macroprudential policy on this relationship. Using a panel of 23 countries over the period of 1996-2014, our results demonstrate a net-positive relationship between financial innovation and gross capital formation. We find no evidence of a net-negative impact of financial innovation on economic growth, challenging the popular and political stigma surrounding financial innovation. We also find little robust evidence of macroprudential policy influencing the relationship between financial innovation and economic growth. Our results support a functional approach to the regulation of financial innovation, which improves the intermediation process, leading to increased capital formation. Highlights:  Financial-sector spending on research and development is used as a proxy for aggregate financial innovation.  Financial innovation is positively related to economic growth through gross capital formation, but demonstrates no significant link with per capita GDP growth or new firm density.  Macroprudential policy does not influence financial innovation's impact on capital formation, and its effect on financial innovation's relationship with other growth measures is specification dependent.

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Section: Effects Of Financial Innovationmentioning

confidence: 99%

Section: Securitizationmentioning

confidence: 99%

Financial innovation, economic growth, and the consequences of macroprudential policies

Bernier

Plouffe

2019

Research in Economics

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“…Barnett-Hart (2009) suggests an appropriate ecosystem of regulations and policy to avoid incentive misalignment. Janicko (2015) emphasizes that the plurality of studies about the positive consequences of FI are at odds with the findings from the case and country-specific studies.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Janicko (2015) has emphasized that the plurality of studies about the positive consequences of FI are at odds with the findings from the case and country-specific studies. Lee et al.…”

Section: Introductionmentioning

confidence: 99%

Linear and non-linear ARDL estimation of financial innovation and economic growth in Ghana

Nsor-Ambala

Amewu

2022

JBSED

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PurposeThis study aimed to explore the effect of Financial Innovation (FI) on economic growth in Ghana, with a dataset spanning 1960–2019, adopting a broader conceptualization of FI as the ratio of broad money to narrow money.Design/methodology/approachThe study employs a non-linear autoregressive distributed lag (ARDL) time series econometric model to estimate data from the World Bank (1960–2019).FindingsThere is no evidence that FI significantly impacts economic growth. This could be due to the early and strict regulation of the financial technology (FIN-TECH) sector and the general inconclusiveness of the impact of financial development on economic growth.Practical implicationsPolicymakers must empirically explore the impact of early and strict regulation on the transformational impact of FI.Originality/valueThe paper is among the first to apply a broader conceptualization of FI in estimating the impact of FI on economic growth.

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“…Financial innovation is understood implemented in the form of a new financial product or operations, the end result of innovative activities in the financial sector. Financial innovation is also seen as a catalyst for the economy, which is a new financial product or process that has different functions in terms of generating additional liquidity [19], ensuring market transparency, availability of information [20]. Financial innovations make it possible to improve the work of financial institutions, offering customers more products and services to maximize profits at the accordingly level of risk.…”

Section: Economics Econometrics and Financementioning

confidence: 99%

Macroeconomic Tools for Ensuring Resilience of the Financial Corporations Sector

Shkuropadska

2020

EUREKA: Social and Humanities

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Research the tools for ensuring resilience of the financial corporations sector is relevant, given the fact that the development of the world economy is increasingly subject to the shock influences, to which financial crises are imposed. The aim of the article is to identify and justify macroeconomic tools according to the directions for ensuring resilience of the financial corporations sector. The theoretical-methodological base of the article is scientific works of scientists and reports of international organizationsfor directions and tools for ensuring resilience of the financial corporations sector and the economy in general. The general approaches and research methods have been used at preparing the article: theoretical generalization, analysis, synthesis and system method. The use of these methods allowed to consider approaches of leading international audit companies to understand the concept “resilience of the financial corporations”. On this basis, there was suggested the author's definition of the concept “resilience of the financial corporations sector” and defined it essential characteristics. It was explained, that the process of ensuring resilience of the financial corporations sector involves the implementation of macroeconomic tools in accordance with the following areas: the introduction of economic stimulus packages, attractive lending conditions, tax and investment benefits, promoting innovation, development of compensation mechanisms, international financial support. The important attention in the study was paid to the role of the state in the process of implementing macroeconomic tools for ensuring resilience of the financial corporations sector. Attention is focused on the fact, that under shock influences the state should implement macroeconomic tools in line with current problems in the development of the financial corporations sector. This in turn will ensure its profitability at a level sufficient for normal functioning.

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Mainstream Versus Heterodox View on Financial Innovation

Cited by 4 publications

References 7 publications

Financial innovation, economic growth, and the consequences of macroprudential policies

Financial innovation, economic growth, and the consequences of macroprudential policies

Linear and non-linear ARDL estimation of financial innovation and economic growth in Ghana

Macroeconomic Tools for Ensuring Resilience of the Financial Corporations Sector

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