金融发展、经济增长和金融创新外文翻译2019

金融发展、经济增长和金融创新外文翻译2019

原文

The Missing-Link between Financial Development and Economic Growth: Financial

Innovation

Ebubekir Mollaahmetoglu, Burcay YasarAkcal

Abstract

The paper investigates the relationship between financial development, financial innovation, and economic growth using a panel data analysis. The sample covers fifteen countries for the period of 2003-2016. Financial development has been considered as a composite variable consisting of four components: financial access, financial depth, financial efficiency, and financial stability. The distinguishing feature of the paper is that it includes financial innovation as another component of financial development in addition to the cited four. We find statistically significant and positive relationship between financial innovation and economic growth (The higher the number of financial innovation, the higher the rate of economic growth). The paper concludes that both financial development and financial innovation have significant impact on economic growth.

Keywords：Financial Development，Financial Innovation，Economic Growth，Panel Data

1 Introduction

Liberalization movements and technological developments are a standout amongst the most significant components influencing the advancement of development of innovation. Along with the innovation and diversification of financial products has broadened the risk preferences, widespread use led to the growth of the market, especially in the 1960s. Many multidimensional studies have been carried out about relationship, and direction and boundaries of the relation, between financial development and economic growth on the basis of developing and advanced countries.

Schumpeter (1912), in “The theory of Economic Development”, outlined that economic development is ginger up by innovation within financial intermediaries.

Therewithal, Schumpeter (1912) highlighted the role of banks in promoting innovation due to banks identify and support the enterprises at implementing the innovations. Levine, (1997) and Mishra, (2008) stressed that a well- developed and functioning financial system can advance economic growth by enabling economic agents to diversify and expand their portfolios and meet their liquidity requirements. Financial innovations lead to a higher level of savings and capital accumulation, consequently, a higher level of economic growth. McKinnon and Shaw (1973) put forward the financial repression hypothesis and emphasized that the liberalization of capital flows, interest rates, and credit facilities will increase effective resource allocation and savings and this in turn will transform into investments. These changes will promote economic growth. With channelling financial resources from informal financial markets to formal financial markets, in other words, transferring of idle funds and internal savings to the financial sector will promote gross savings in the economies. According to Levine (1997), via technological change and capital accumulation, financial systems yield in economic growth. Affected capital accumulation by the financial system is due to alteration of the savings rate or re-allocation of savings. Better financial systems activate and mobilize savings and facilitate efficient allocation of resources (Greenwood et al., 2010, King and Levine, 1993). Also, different approach were put forward in these issues such as financial development may lead to high systemic risk. (Gai et al., 2008, Gennaioli et al., 2012).

In a well-functioning financial system, thanks to new technologies and entrepreneurs, in a greater number of increased financial instruments and product diversity with financial institutions and organizations, widespread use of financial instruments and it’s channels, mobilization of improving resources through savings and ensuring the efficiency trigger off investments and the realization of economic growth and increase in productivity in real sector.

Many variables are used in the previous literature as indicators of financial development. However, variables representing financial development need to be organized systematically. Cihak et.all, (2012), developed several measures of four characteristics of financial institutions and markets and financial development