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The Relationship Between Financial Development and Economic Growth: New Insights Using Quadruple and Quintuple Helix Innovation Framework and Way Forward

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  • Abdul Rahman

    (COMSATS University)

  • Muhammad Arshad Khan

    (COMSATS University)

Abstract

In this study, we showed that the spurts and reversals in GDP growth can be reinvented through consistency in financial and real sector policies along with the strengthening of knowledge democracy, and quality of democracy. To revert the toing and froing situation, this study emphasizes the importance of bringing together quadruple and quintuple helix actors (academia, industry, government, and civil society) to strengthen financial innovations. The quadruple and quintuple helix model forms an integral part of innovation policy, which helps to strengthen finance-growth nexus in developing countries like Pakistan. The present paper suggests that innovations and knowledge democracy are important determinants of finance-growth relationship besides other macroeconomic variables. Despite the importance of the quadruple and quintuple helix model, the model is still far from well-established concept in research and innovation policy in Pakistan. To this end, constructive steps are proposed to espouse the quadruple and quintuple helix innovation model to support government to engage with and facilitate the participation of civil society in discovery process. The policymakers may take necessary steps to strengthen academia-industry-government-civil society relationships, and ensure knowledge democracy and quality of democracy to achieve sustainable growth. The study contributes to the existing literature on innovations through identifying mechanism to foster the quadruple and quintuple helix model.

Suggested Citation

  • Abdul Rahman & Muhammad Arshad Khan, 2024. "The Relationship Between Financial Development and Economic Growth: New Insights Using Quadruple and Quintuple Helix Innovation Framework and Way Forward," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 5939-5964, June.
    • Handle: RePEc:spr:jknowl:v:15:y:2024:i:2:d:10.1007_s13132-023-01276-y
    DOI: 10.1007/s13132-023-01276-y
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    More about this item

    Keywords

    Financial development; Economic growth; Quality of democracy; Quadruple helix innovation framework; Quintuple helix innovation framework; Developing countries;
    All these keywords.

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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