IDEAS home Printed from https://ideas.repec.org/a/wsi/afexxx/v14y2019i03ns201049521950012x.html
   My bibliography  Save this article

Financial Development, Technology And Economic Development: The Role Of Institutions In Developing Countries

Author

Listed:
  • SAMINA SABIR

    (University of Azad Jammu and Kashmir, Muzaffarabad, Azad Jammu and Kashmir, Pakistan)

  • RASHID LATIF

    (University of Azad Jammu and Kashmir, Muzaffarabad, Azad Jammu and Kashmir, Pakistan)

  • UNBREEN QAYYUM

    (#x2020;Pakistan Institute of Development Economics, Quaid-i-Azam University Campus, Islamabad, Islamabad Capital Territory 44000, Pakistan)

  • KAMRAN ABASS

    (University of Azad Jammu and Kashmir, Muzaffarabad, Azad Jammu and Kashmir, Pakistan)

Abstract

Financial sector development plays a pivotal role in the process of economic growth and development through mobilization of savings and creating investment opportunities. Financial development also increases the level of technology by providing finance to entrepreneurs for technological innovations which leads to economic growth. Moreover, financial markets develop rapidly in those countries which have strong legal system to enforce property rights, support private contractual arrangement and protect the rights of investors that can support real economic activities. Therefore, the presence of good quality institutions strengthens financial development which leads to technological development and growth. This study investigates the impact of financial development, technology and institutions on economic growth of selected developing countries over the time span of 1996–2015. This study extends the Augmented Solow growth model by incorporating variables such as financial development, technology, institutions and their interaction terms in the model. Due to endogeneity problem, the empirical model used in the study is estimated by System Generalized Method of Moments (System-GMM). Empirical results show that financial development, technology and institutions have very strong effects on the economic growth developing countries. To attain a sustainable economic growth, developing countries should develop their institutions which are necessary for the effective functioning of financial markets that stimulate economic growth by providing finance to entrepreneurs for innovations in technological sectors.

Suggested Citation

  • Samina Sabir & Rashid Latif & Unbreen Qayyum & Kamran Abass, 2019. "Financial Development, Technology And Economic Development: The Role Of Institutions In Developing Countries," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., vol. 14(03), pages 1-25, September.
    • Handle: RePEc:wsi:afexxx:v:14:y:2019:i:03:n:s201049521950012x
    DOI: 10.1142/S201049521950012X
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S201049521950012X
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S201049521950012X?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Clement Olalekan Olaniyi, 2022. "On the transmission mechanisms in the finance–growth nexus in Southern African countries: Does institution matter?," Economic Change and Restructuring, Springer, vol. 55(1), pages 153-191, February.
    2. Bisharat Hussain Chang & Khalil Ahmed Channa & Emmanuel Uche & Osamah Ibrahim Khalaf & Osamah Waheed Ali, 2022. "Analyzing the impacts of terrorism on innovation activity: A cross country empirical study," Advances in Decision Sciences, Asia University, Taiwan, vol. 26(Special), pages 124-161, December.

    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:wsi:afexxx:v:14:y:2019:i:03:n:s201049521950012x. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/afe/afe.shtml .

    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.