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The digital economy provides companies with financial stability and highly developed technological tools to run businesses based on their operations’ transparency. Business stability is formed due to the introduction of a competence-based management system in financial organizations in the Russian corporate sector.

In terms of the digital economy as financial and technological companies, we consider large banks and other financial organizations to develop risk-oriented technologies for managing financial stability based on digitization.

The main aim of this chapter is to describe the features, the factors, and the conditions for the competence-based management development system. It highlights the role of the system for the banks and the financial technologies used by companies for sustainable development.

Islamic financial institutions (IFIs) have gained popularity recently in the Islamic countries and countries with mixed religious practices. Due to its profit–loss sharing partnership contracts and integrated social and risk management practices, IFI can finance financially distressed firms, and firms with specialized sectors, better than the traditional development financial institutions (DFIs). Should they need large amount of financing, both existing financially unsuccessful industries and new development initiatives can be financed with Sukuk issuance. This chapter investigates the growth of these two industries – IFIs and DFIs, with respect to various indicators, compares the initiatives that establish the dominating character of IFIs over the DFIs, discusses the reasons behind such turnaround, and the future of DFIs. IFIs have been enjoying a superior growth in assets and deposits, asset quality, risk management, and profitability over the DFIs in Malaysia. Among many, the study identifies regulatory incentives to IFIs, inefficient management of DFIs, and most importantly, a paradigm shift through Islamic finance as primary reasons behind gradual disappearance of DFIs. The next generation of IFIs will emerge as the Islamic Development Financial Institutions and may takeover the role that is played by the DFIs most recently.

This chapter elaborates on the perspectives of financial development of countries of Central Asia and China through cooperation with Russia. The authors determine financial resources for the development of the countries of Central Asia and China and figure out possible scenarios for attracting additional financial resources and conclude that financial resources have a decisive role in socioeconomic development. It is substantiated that the increase and expansion of cooperation with Russia are the preferable scenario for attracting additional financial resources. The authors recommend expanding cooperation with Russia within the implementation of the selected optimal scenario are given.

This chapter models industrial, tech, and financial cooperation between Russia and the countries of the Asia-Pacific region. We use several complex methods of economic and mathematical modeling to analyze specific features of such cooperation and determine critical factors in industrial, technological, and financial development. The preferable choice for the Asia-Pacific region is cooperation with Russia, which is ready for an increase in imports of industrial and high-tech products as well as joint industrial innovational entrepreneurship. Investments would lead to synergetic effects, ensuring simultaneous industrial, technological, and financial development.

The different methods were used to measure the impact of financial development on economic growth. This is largely due to a certain set of factors that have the influence of their relationship. First of all, based on the research results, several groups of factors are identified that determine the nonlinear interaction of the financial sector and economic growth. This is characterized by the fact that at different values of these indicators, financial development has an ambiguous impact on economic growth. There are several such groups in total. The first ones are usually institutional factors, indicators that characterize the legal system and the level of development of social institutions. In the absence of a sufficient level of legal framework, financial markets will be unstable, which will undermine the demand for financial sector services. Countries with a high level of development of legal institutions have a guarantee for economic entities in the stable development of economic relations.

Although many previous studies have explored the impact of financial development in promoting economic growth, there is relatively little evidence regarding the effect of political institutions on financial development. This chapter offers strong evidence that political Islam and democracy promote the growth of Islamic finance. The authors use a panel estimator and a sample of 13 Muslim democratic countries for the years 1985–2015 to examine the effect of Islamic political parties and democracy on Islamic finance development. The chapter’s findings provide evidences that Islamist power and democracy are key determinants of Islamic finance development in the studied countries. Moreover, democracy can be captured by political elites in emerging countries where institutions are relatively weak.

In the present era, there is visible trend of transition of the economy from the managerial capitalism to finance capitalism, which increases the role of finance in the economic development of a country. The concept of financial development deals with the access, depth, efficiency, and stability of the financial institution and the market of a country. On the other hand, the financial integration is the degree of the financial openness of a country. There are de facto (gross stock of foreign assets and liabilities as a ratio of GDP, cross border capital flows) and de jure (capital account restrictions) measures of the financial integration. An efficient financial system increases the savings rate, which enhances capital accumulation in the economy. This process will channelize the fund from the household to the financial system. The economic liberalization induces the household to utilize their global market fund and enhance the marginal productivity of the capital. A deeper financial integration is expected to increase the public access in the domestic financial market as well as in the global market. Financial integration has some indirect effect on the economic growth through expansion and development of the financial system. In this context, this study examines the state of financial development and the financial integration across emerging countries in Asia. An attempt also was made to investigate whether the developed financial system promotes the financial integration or the financial integration induces the authority to develop the financial system. This study is based on the selected Asian countries over the period 2001–2016. Empirical evidence also support a significant positive association between the indicators of financial development and financial integration. It also indicates an empirical relationship from the financial development to the financial integration, and vice versa.

The literature on sustainable development reveals that the financial sector and the real sector should maintain a coherent association in the long run. Thus, like that in a country-level significance, the relevance of the investigations of the interrelationships between the financial sector’s development and the growth and development of the states within a country is also required to be done. This chapter tries to examine the interrelationships between two sets of variables, bank credit and state output, and bank credit and human development, for the pre-reform and post-reform periods. Using the appropriate time series econometric analysis, the study finds no long-run relationships between credit and NSDP during the pre-reform period but it has observed a number of states where such stable relations hold during the post-reform period. Again, there are mixed results between the two in the Granger causality analysis during both the periods. There are the states like AP, Bihar, Karnataka, Kerala and WB where developments in the financial sector influence the growth of the real sector, while the reverse causality, that is, from the real sector to the financial sectors works in case of Assam, Haryana, MP and Maharashtra. Bidirectional causality between the two is observed in the states like TN, WB, etc. Further, the study finds very small number of states where credit and human development are interlinked in the long run. However, in the short run, the financial sector makes influences to the human development in case of the states like Bihar, Odisha and TN.

This chapter measures the contribution of financial development to economic growth in Russia. The expansion of banking system causes institutional improvement in the economy, which results in extended and sustained economic growth due to changes in financial institutions. This chapter proposes the novel idea of principal component analysis (PCA) to overcome these problems. Then, the PCA method provides loading factors that condense financial information into a few orthogonal factors, which are used as explanatory variables. The study indicates that financial development explains both per capita GDP and its growth rate. The explanatory power of the models improves by adding control variables and econometric safeguards such as correcting for nonstationarity and multicolinerity. However, utilizing the PCA method to obtain an orthogonal set of variables to represent financial development, deepening, and concentration improves the performance of the model even further.

This paper explores the relationship between foreign direct investments and financial reporting changes via financial development in 12 Latin American countries during the period from 1997 to 2010.

In order to control the possible endogeneity problem, the Generalized Method of Moments (GMM) estimation technique has been conducted using country-level panel data obtained from the World Development Indicators website.

The empirical analyses provide evidence that international accounting standards have a significant effect on foreign direct investments. However, financial development associated with such standards reduces this positive effect. This is an important finding, suggesting that investors are likely to prefer portfolio to direct investments in Latin American financial markets that require or permit the use of international accounting standards.

The conclusions that have been drawn from this study are important for investors, creditors, and regulators. Although international accounting standards appear to affect foreign investments, there could be a lack of adaptation of these standards to specific economic environments due to cultural, educational, and economic factors. Therefore, firms, regulators, professional organizations, and accounting firms should make necessary arrangements so that the benefits of using these standards increase their costs.

The study contributes to the international accounting literature by examining the effects of international accounting standards and financial development on foreign direct investments in Latin America.