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Article
Publication date: 30 August 2011

Qazi Muhammad Adnan Hye and Irina Dolgopolova

The purpose of this paper is to construct a financial development index for China and to analyze the relationship between the financial sector development index and…

Abstract

Purpose

The purpose of this paper is to construct a financial development index for China and to analyze the relationship between the financial sector development index and economic growth.

Design/methodology/approach

This study uses Johansen‐Juselius cointegration approach to determine long run relationship between variables. To determine the strength of causal relationship variance decomposition is used. The stability of coefficient is evaluated through rolling window regression method.

Findings

The results of Johansen‐Juselius cointegration approach confirm long run relationship between financial development index and economic growth. Normalized cointegrating vector indicates that financial development index, real interest rate, capital and labor force positively determine economic growth in China. The yearly coefficient is provided by the rolling regression and indicates that financial development index negatively link to economic growth in 1991, 1992, 1994, 1995, 1999, 2000, 2003‐2005. Interest rate is negatively linked to economic growth in 1991‐1996, 2007 and 2008. The variance decomposition method validates that shocks in financial development index and real interest rate are explained by economic growth.

Originality/value

A financial development index for China is constructed and the relationship between economic growth and financial development is indicated.

Details

Chinese Management Studies, vol. 5 no. 3
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 13 September 2021

Dalia M. Ibrahiem and Rasha Sameh

Achieving the goals of the sustainable development strategy and Egypt’s vision 2030 depends mainly on the existence of sources of funds. And since Egypt faces a great…

Abstract

Purpose

Achieving the goals of the sustainable development strategy and Egypt’s vision 2030 depends mainly on the existence of sources of funds. And since Egypt faces a great challenge in obtaining finance, then analyzing the drivers of financial development is a vital issue and there is a persistent need to shed light on the key obstacles for it. Thus, this paper aims to empirically assess the impact of natural resources, foreign direct investment (FDI) net inflows, education and clean energy sources on financial development in Egypt using the data of the 1971–2014 period.

Design/methodology/approach

The paper uses auto-regressive distributed lag and Toda-Yamomoto approaches to fulfill the purpose.

Findings

Empirical results signify that all variables except natural endowments stimulate financial development which can suggest the presence of the natural resources curse in Egypt. Moreover, the feedback effect between financial development and FDI is recognized. Clean energy sources cause financial development and natural endowments. Financial development causes natural endowments and FDI leads to the deployment of more clean energy resources.

Practical implications

Several crucial policy implications are suggested based upon these results as improving the quality and quantity of education and encouraging both domestic and foreign investors by providing several incentives. Moreover, the government has to enhance green finance through financing solar energy projects and other environmentally friendly projects.

Originality/value

It is the first research for Egypt that explores natural resource-financial development nexus using time series analysis according to our information, and two important variables are included in the model which is clean energy sources and FDI. Then, although several studies examined the impact of financial development on clean energy no empirical study before assessed the impact of clean energy on financial development.

Details

International Journal of Energy Sector Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1750-6220

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Article
Publication date: 13 August 2021

Tarsem Lal

The purpose of this paper is to check the impact of financial inclusion on economic development of marginalized communities through the mediation of socio-economic empowerment.

Abstract

Purpose

The purpose of this paper is to check the impact of financial inclusion on economic development of marginalized communities through the mediation of socio-economic empowerment.

Design/methodology/approach

In order to fulfil the objectives of the study, primary data were collected from 382 bank customers belonging to marginalized communities breathing in Jammu district of J and K by using purposive sampling technique. The data were collected during the month of April–August 2020. Multivariate statistical techniques such as EFA, CFA and SEM were used for data analysis and scale purification.

Findings

The study’s results reveal that financial inclusion has a direct and significant impact on economic development of marginalized communities through the mediation of social and economic empowerment. The study highlights that despite various initiatives taken by the government towards financial inclusion, there is a denial from the financial institutions to extend the credit to the marginalized communities due to lack of education, illiteracy, lack of awareness, attitude of bankers and policy directions to the banking sector, which confine these communities to feel proud, dignified, confident and self-reliant to face any financial crisis.

Research limitations/implications

First the in-depth analysis of the study is restricted to Jammu district only that restricts the generalization of the results to the whole population of J and K. Second, the data were collected from respondents belonging to marginalized communities only. Third, comparative study of marginalized households who are covered under the financial inclusion drive and those who are still financially excluded has not been done yet. Fourth, the questionnaire approach was the only way to gather primary data and thus, the results might have a common-method bias.

Originality/value

The study makes contribution in the direction of financial inclusion narrative relating to socio-economic empowerment and economic development of marginalized communities. It looks into how for the socio-economic aspects of marginalized communities influence their exclusion from the financial system of the country. The study also provides valuable insights for the policymakers, researchers and academicians both at the countrywide and intercontinental level to devise and put into practice programmes that will widen right to use financial products and services leading to cutback of poverty incidence, income parity, social and economic empowerment, economic development and reduction in caste and gender based discrimination.

Details

International Journal of Social Economics, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 17 August 2021

Ali Amin, Rizwan Ullah Khan and Arif Maqsood

This study examines whether financial development affects entrepreneurship, and how financial openness moderate this relationship.

Abstract

Purpose

This study examines whether financial development affects entrepreneurship, and how financial openness moderate this relationship.

Design/methodology/approach

The study employs panel data consisting of 781 country-year observations of 48 countries of Asia for the period 2001–2018.

Findings

The study provides empirical support for the eclectic theory of entrepreneurship in Asian countries. The findings of the study indicate that effective allocation of resources and ease of transactions increases the entrepreneurial activities in the country. Additionally, the less stringent regulations, allowing for the cross border transactions, increase the funds availability to the entrepreneurs which in turn increase innovation and establishment of new businesses.

Research limitations/implications

The study only considered the moderating influence of financial openness on the nexus. Other indicators such as governance quality and political stability could also have significant impact on entrepreneurship. Further, our study was based on countries belonging to Asian continent. Since Asian continent has culture distinguished from other regions, therefore, the results cannot be generalized to the other continents.

Practical implications

The study’s results provide insight to policymakers and regulators that in order to increase the entrepreneurial activities, the financial sector improvement is of paramount importance. The regulators should focus on well-functioning financial system and availability of capital to improve the investor's confidence and boost economic activities.

Originality/value

The study provides novel evidence on the effects of financial development on entrepreneurship and moderating influence of financial openness in the context of the entire Asian region, which is yet an unexplored area. This paper offers a fresh contribution in this area.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

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Book part
Publication date: 24 October 2018

L. Yu. Andreeva, T. V. Epifanova, O. V. Andreeva and A. S. Orobinsky

The digital economy provides companies with financial stability and highly developed technological tools to run businesses based on their operations’ transparency…

Abstract

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.

Details

Contemporary Issues in Business and Financial Management in Eastern Europe
Type: Book
ISBN: 978-1-78756-449-7

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Article
Publication date: 23 June 2021

Niharika Sinha and Swati Shastri

This paper empirically examines the impact of financial development on domestic investment in India for the period 1989–2017.

Abstract

Purpose

This paper empirically examines the impact of financial development on domestic investment in India for the period 1989–2017.

Design/methodology/approach

This study employs the autoregressive distributed lag (ARDL) bounds testing approach to co-integration to test the long-run relationship between financial development and domestic investment. To test the direction of causality, Toda–Yamamoto causality test and vector error correction model (VECM) Granger causality/Block Exogeneity Wald test have been employed. Investment has been measured by Gross Capital Formation. To capture various aspects of financial development in India, eight alternative indicators (both bank based and market based) have been used. With the help selected indicators, a composite index (FINDEX) of financial development has been constructed using principal component analysis (PCA).

Findings

The estimated result finds evidence in favour of positive, short-run and long-run impact of financial development on investment in the Indian economy. Both bank-based and market-based indicators are found to significantly affect the level of investment. The significant effect of efficiency-based financial development indicators (both bank based and market based) upon domestic investment implies that there is a need to implement policies that ensure the efficiency of financial intermediation.

Originality/value

To the best of authors' knowledge, not much research has been done to explore the relationship between financial development and domestic investment, especially in the case of Indian economy. This study also tries to find the impact of bank-based and market-based financial development indicators upon domestic investment to explore banks vs market issue.

Details

South Asian Journal of Business Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2398-628X

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Article
Publication date: 21 June 2021

Arun Kumar Giri, Geetilaxmi Mohapatra and Byomakesh Debata

The main purpose of the present research is to analyze the relationship between technological development, financial development and economic growth in India in a…

Abstract

Purpose

The main purpose of the present research is to analyze the relationship between technological development, financial development and economic growth in India in a non-linear and asymmetric framework.

Design/methodology/approach

The study employs the nonlinear autoregressive distributed lags model (NARDL) and Hetemi J asymmetric causality tests to explore nonlinearities in the dynamic interaction among the variables. The stationarity properties of data are checked by using Ng–Perron and ADF structural break unit root tests. The unit root test confirms that the variables are non-stationarity in level and are differenced stationary.

Findings

The study finds that there is a cointegrating relationship between technological development, financial development and economic growth in the long run. The findings suggest that a positive shock in technological development increases economic growth (coefficient value 1.497 at 1% significance level) and a negative shock will harm economic performance (coefficient value −0.519 at 1% significance level). A long-term positives shock in financial development boosts the economy (coefficient value 1.08 at 5% significance level) and negative shock hampers the economic performance (coefficient value −1.09 at 5% significance level). The asymmetric causality test result confirms bi-directional causality between technological development and economic growth and unidirectional causality from negative economic growth to negative technological development and bi-directional causality between economic growth and financial development, unidirectional negative financial development to economic growth.

Research limitations/implications

The results of this research can significantly facilitate stakeholders and policymakers in devising short-term as well as long-term policies for financial development and technological innovation to achieve sustainable long-run economic growth in India.

Originality/value

This paper is the first of its kind to empirically examine the cointegrating and causal relationship between technology, financial development and economic growth in India using non-linear asymmetric cointegration and causality tests.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

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Book part
Publication date: 14 December 2018

Shi Min How, Mamunur Rashid, Andrew Saw Tek Wei, Shamshubaridah Ramlee and Ng Yuen Yein

Islamic financial institutions (IFIs) have gained popularity recently in the Islamic countries and countries with mixed religious practices. Due to its profit–loss sharing…

Abstract

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.

Details

Management of Islamic Finance: Principle, Practice, and Performance
Type: Book
ISBN: 978-1-78756-403-9

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Book part
Publication date: 19 June 2019

Bruno S. Sergi, Elena G. Popkova, Natalia Vovchenko and Marina Ponomareva

This chapter elaborates on the perspectives of financial development of countries of Central Asia and China through cooperation with Russia. The authors determine financial

Abstract

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.

Details

Asia-Pacific Contemporary Finance and Development
Type: Book
ISBN: 978-1-78973-273-3

Keywords

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Book part
Publication date: 29 July 2019

Bruno S. Sergi, Elena G. Popkova, Anastasia A. Sozinova and Olga V. Fetisova

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…

Abstract

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.

Details

Tech, Smart Cities, and Regional Development in Contemporary Russia
Type: Book
ISBN: 978-1-78973-881-0

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