IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2024-02-40.html
   My bibliography  Save this article

Financial Innovation and Sustainable Development in Pakistan: An Empirical Study

Author

Listed:
  • Ihtisham ul Haq

    (Department of Economics, Kohat University of Science and Technology, Kohat, Pakistan,)

  • Shavkat Otamurodov

    (Department of Economics, Termez University of Economics and Service, Termez, Uzbekistan,)

  • Khurram Abbas

    (Department of Management Sciences, COMSATS University Islamabad, Sahiwal Campus, Sahiwal, Pakistan.)

  • Aisha Nowshid Khan

    (Department of Economics, Kohat University of Science and Technology, Kohat, Pakistan,)

Abstract

Pakistan is facing several challenges including economic, social, energy and environmental and is one of the most climate affected country. Henceforth, it is recommended to unearth the factors of sustainable development of Pakistan. This study explores the effect of financial innovation on sustainable development along with energy and trade openness as control variables. Results confirmed that long run relationship exists among the mentioned variables. Financial innovation is positively affecting sustainable development in long run as well as in short run. Likewise, energy is positively influencing sustainable development in both time spans whereas trade openness and energy only influence sustainable development in long run. Financial sector should keep on finding ways for innovation and utilizing fin-tech for ensuring and enhancing financial innovation. Government also must care and adopt policies that are encouraging financial innovation to ensure sustainable development in Pakistan.

Suggested Citation

  • Ihtisham ul Haq & Shavkat Otamurodov & Khurram Abbas & Aisha Nowshid Khan, 2024. "Financial Innovation and Sustainable Development in Pakistan: An Empirical Study," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 402-409, March.
    • Handle: RePEc:eco:journ2:2024-02-40
    as

    Download full text from publisher

    File URL: https://econjournals.com/index.php/ijeep/article/download/15619/7778/36364
    Download Restriction: no
    File URL: https://econjournals.com/index.php/ijeep/article/view/15619/7778
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Khurram Shehzad & Umer Zaman & Ana Ercília José & Emrah Koçak & Paulo Ferreira, 2021. "An Officious Impact of Financial Innovations and ICT on Economic Evolution in China: Revealing the Substantial Role of BRI," Sustainability, MDPI, vol. 13(16), pages 1-17, August.
    3. Beck, Thorsten & Levine, Ross, 2004. "Stock markets, banks, and growth: Panel evidence," Journal of Banking & Finance, Elsevier, vol. 28(3), pages 423-442, March.
    4. Alex Bara & Gift Mugano & Pierre Le Roux, 2016. "Financial innovation and economic growth in the SADC," African Journal of Science, Technology, Innovation and Development, Taylor & Francis Journals, vol. 8(5-6), pages 483-495, December.
    5. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    6. Diego Comin & Ramana Nanda, 2019. "Financial Development and Technology Diffusion," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 67(2), pages 395-419, June.
    7. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    8. Ben S. Bernanke, 2023. "Nobel Lecture: Banking, Credit, and Economic Fluctuations," American Economic Review, American Economic Association, vol. 113(5), pages 1143-1169, May.
    9. Laeven, Luc & Levine, Ross & Michalopoulos, Stelios, 2015. "Financial innovation and endogenous growth," Journal of Financial Intermediation, Elsevier, vol. 24(1), pages 1-24.
    10. Minhaj Ali & Shujahat H. Hashmi & Muhammad R. Nazir & Ahmer Bilal & Muhammad I. Nazir, 2021. "Does financial inclusion enhance economic growth? Empirical evidence from the IsDB member countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5235-5258, October.
    11. Philippe Aghion & Peter Howitt & David Mayer-Foulkes, 2005. "The Effect of Financial Development on Convergence: Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(1), pages 173-222.
    12. Guohua Liu & Mohammed Arshad Khan & Ahsanuddin Haider & Moin Uddin, 2022. "Financial Development and Environmental Degradation: Promoting Low-Carbon Competitiveness in E7 Economies’ Industries," IJERPH, MDPI, vol. 19(23), pages 1-16, December.
    13. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    14. Aller, Carlos & Ductor, Lorenzo & Herrerias, M.J., 2015. "The world trade network and the environment," Energy Economics, Elsevier, vol. 52(PA), pages 55-68.
    15. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    16. Mohamed Amine Boutabba, 2014. "The impact of financial development, income, energy and trade on carbon emissions: Evidence from the Indian economy," Post-Print hal-02877966, HAL.
    17. Alex Bara & Gift Mugano & Pierre Le Roux, 2016. "Financial Innovation and Economic Growth in the SADC," Working Papers 627, Economic Research Southern Africa.
    18. Akçomak, I. Semih & ter Weel, Bas, 2009. "Social capital, innovation and growth: Evidence from Europe," European Economic Review, Elsevier, vol. 53(5), pages 544-567, July.
    19. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
    20. Mariana Mazzucato, 2013. "Financing innovation: creative destruction vs. destructive creation," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(4), pages 851-867, August.
    21. Muhammad Rizwan Nazir & Yong Tan & Muhammad Imran Nazir, 2021. "Financial innovation and economic growth: Empirical evidence from China, India and Pakistan," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 6036-6059, October.
    22. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
    23. Maskus, Keith E. & Neumann, Rebecca & Seidel, Tobias, 2012. "How national and international financial development affect industrial R&D," European Economic Review, Elsevier, vol. 56(1), pages 72-83.
    24. Oruj Gasimli & Ihtisham ul Haq & Shahid Munir & Muhammad Hasnain Khalid & Sisira Kumara Naradda Gamage & Alam Khan & Muhammad Ishtiaq, 2022. "Globalization and Sustainable Development: Empirical Evidence from CIS Countries," Sustainability, MDPI, vol. 14(22), pages 1-15, November.
    25. Hickel, Jason, 2020. "The sustainable development index: Measuring the ecological efficiency of human development in the anthropocene," Ecological Economics, Elsevier, vol. 167(C).
    26. Michael Adusei, 2013. "Financial Development and Economic Growth: Evidence from Ghana," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 7(5), pages 61-76.
    27. Boutabba, Mohamed Amine, 2014. "The impact of financial development, income, energy and trade on carbon emissions: Evidence from the Indian economy," Economic Modelling, Elsevier, vol. 40(C), pages 33-41.
    28. Ihtisham ul Haq & Dilawar Khan & Hassan Taj & Piratdin Allayarov & Azeem Abbas & Muhammad Khalid & Muhammad Awais, 2021. "Agricultural Exports, Financial Openness and Ecological Footprints: An Empirical Analysis for Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 256-261.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Janice Tieguhong Puatwoe & Serge Mandiefe Piabuo, 2017. "Financial sector development and economic growth: evidence from Cameroon," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 3(1), pages 1-18, December.
    2. Zahid Mehmood Akhtar & Dr. Faid Gul & Dr. Fauzia Mubarak, 2024. "Economic Growth and Financial Intermediation Nexus in Pakistan: An ARDL Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(1), pages 542-551.
    3. Muhammad Rizwan Nazir & Yong Tan & Muhammad Imran Nazir, 2021. "Financial innovation and economic growth: Empirical evidence from China, India and Pakistan," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 6036-6059, October.
    4. Md. Qamruzzaman & Wei Jianguo, 2017. "Financial innovation and economic growth in Bangladesh," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 3(1), pages 1-24, December.
    5. Sethi, Pradeepta & Chakrabarti, Debkumar & Bhattacharjee, Sankalpa, 2020. "Globalization, financial development and economic growth: Perils on the environmental sustainability of an emerging economy," Journal of Policy Modeling, Elsevier, vol. 42(3), pages 520-535.
    6. Alarudeen Aminu Ph.D & Isiaka Akande Raifu & Bolanle Deborah Oloyede, . "Financial Development and Manufacturing Output Growth Nexus in Nigeria: The Role Of Institutional Quality," Journal of Economic and Sustainable Growth 2, Office Of The Chief Economist, Development Bank of Nigeria.
    7. Md. Qamruzzaman & Wei Jianguo & Sharmin Jahan & Zhu Yingjun, 2021. "Financial innovation, human capital development, and economic growth of selected South Asian countries: An application of ARDL approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4032-4053, July.
    8. Muhammad Shahbaz & Mita Bhattacharya & Mantu Kumar Mahalik, 2017. "Finance and income inequality in Kazakhstan: evidence since transition with policy suggestions," Applied Economics, Taylor & Francis Journals, vol. 49(52), pages 5337-5351, November.
    9. Shahbaz, Muhammad & Haouas, Ilham & Hoang, Thi Hong Van, 2019. "Economic growth and environmental degradation in Vietnam: Is the environmental Kuznets curve a complete picture?," Emerging Markets Review, Elsevier, vol. 38(C), pages 197-218.
    10. Enisan, Akinlo A. & Olufisayo, Akinlo O., 2009. "Stock market development and economic growth: Evidence from seven sub-Sahara African countries," Journal of Economics and Business, Elsevier, vol. 61(2), pages 162-171.
    11. Charfeddine, Lanouar & Ben Khediri, Karim, 2016. "Financial development and environmental quality in UAE: Cointegration with structural breaks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 1322-1335.
    12. Abdin, Joynal & Sharma, Abhijit & Trivedi, Rohit & Wang, Chengang, 2024. "Financing constraints, intellectual property rights protection and incremental innovation: Evidence from transition economy firms," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    13. Muhammad Qayyum & Yuyuan Yu & Mir Muhammad Nizamani & Saqlain Raza & Minhaj Ali & Shijie Li, 2023. "Financial Instability and CO2 Emissions in India: Evidence from ARDL Bound Testing Approach," Energy & Environment, , vol. 34(4), pages 808-829, June.
    14. Rosa Capolupo, 2018. "Finance, Investment and Growth: Evidence for Italy," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 47(1), pages 145-186, February.
    15. Bekhet, Hussain Ali & Latif, Nurul Wahilah Abdul, 2018. "The impact of technological innovation and governance institution quality on Malaysia's sustainable growth: Evidence from a dynamic relationship," Technology in Society, Elsevier, vol. 54(C), pages 27-40.
    16. Eléazar Zerbo, 2015. "What determines the long-run growth in Sub-Saharan Africa? Exploring the role of energy, trade openness and financial development in six countries," Working Papers hal-01238524, HAL.
    17. Ertugrul, Hasan Murat & Çetin, Murat & Şeker, Fahri & Dogan, Eyüp, 2015. "The impact of trade openness on global carbon dioxide emissions: Evidence from the top ten emitters among developing countries," MPRA Paper 97539, University Library of Munich, Germany, revised 10 Mar 2016.
    18. Shahzad, Syed Jawad Hussain & Kumar, Ronald Ravinesh & Zakaria, Muhammad & Hurr, Maryam, 2017. "Carbon emission, energy consumption, trade openness and financial development in Pakistan: A revisit," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 185-192.
    19. Gründler, Klaus & Weitzel, Jan, 2013. "The financial sector and economic growth in a panel of countries," Discussion Paper Series 123, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    20. Hamdi El Asli & Lakhmaiss Hamid & Afif Zineb & Azeroual Mohamed, 2024. "Impact of, Human Capital, Economic Factors, Energy Consumption, and Urban Growth on Environmental Sustainability in Morocco: An ARDL Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 656-668, March.

    More about this item

    Keywords

    Financial Innovation; Energy; Trade; Sustainable Development;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • F1 - International Economics - - Trade
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2024-02-40. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.