The Role of Financial Innovation in Economic Growth: A Cross-Country Analysis

Abstract

Financial innovation, encompassing a wide range of products, processes, and technologies, has become a focal point in discussions about economic growth and development. This study conducts a cross-country analysis to explore the role of financial innovation in driving economic growth across different economies. Drawing on a comprehensive dataset of countries spanning various income levels and stages of development, we examine the relationship between financial innovation and key indicators of economic growth, including GDP per capita, productivity, investment, and entrepreneurship. Our analysis considers a diverse array of financial innovations, including new financial instruments, technological advancements in banking and finance, regulatory reforms, and changes in financial market structure.