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The influence of VAT applied to financial services on the size of the financial sector is analyzed empirically. The authors use data from 36 European Union and OECD countries for the period from 1961 to 2012. Dynamic panel data techniques are used, concretely the GMM System. An unbalanced panel is handled. The results allow the authors to support the theoretical analysis that financial VAT has no significant effect on financial sector development. Results are robust to the specifications of the dependent and target variables and to the econometric method applied.

There is a link between economic progress and Financial Development. In order to analyze the potential for influencing Economic Growth, this study will look at the underlying elements that drive the development of Syria’s Financial Sector. The research team is also speculating on how much Economic Growth these effects will bring. A Dynamic Linear Model that takes into account Financial Reforms and changes on the Legal System was used to analyze the Impact of Financial Development on Economic Growth between 1980 and 2018. We were able to measure many dimensions of Financial Development with the use of a new IMF Financial Development Indicator, overcoming the limits of single traditional variables that have been widely used. The ARDL Bounds Test approach, which is based on unit root tests, was used. The Error Correction Model was also applied. The country’s Financial Development had a favorable and statistically significant effect on Economic Growth in Syria in the short and long terms. A lot of factors influence Economic Growth, including the Legal System, overall Government Expenditure, and the Exchange Rate. The Supply Leading Hypothesis of Patrick (1966) was realized in Syria,hence Financial Development leads to Economic Growth, consistent with the proposal of “more Finance, more Growth” (Levine, 2003). Financial Development is a necessary condition and prerequisite for Economic Growth in Syria, which is consistent with the (Finance Lead Growth Theory). The model could be very useful in decision-making, especially those related to reform policies to promote the SDGs or to modify current policies in response to a possible global financial crisis or shock.

This study analyzes the influence of information and communication technology (ICT) and financial developments on the economic growth in high-income countries. This research uses the panel data regression method with a random effects model (REM) approach. The data were sourced from the World Bank and the International Telecommunication Union publications from 2001–2020. The results show that ICT (fixed telephone subscriptions, mobile/cellular telephone subscriptions, internet users and fixed broadband subscriptions) had no significant effect on economic growth. On the other hand, financial development (domestic credit to the private sector and stock market capitalization) had a significant effect on economic growth. Thus, indicators of financial development are better at promoting economic growth in high-income countries. Domestic credit to the private sector has a greater influence on economic growth compared to stock market capitalization. The research implications show that it is necessary to increase the contribution of financial development, such as facilitating access to credit to the real sector and increasing access to the capital market for economic actors to increase economic growth.  

The purpose of the paper is to identify the factors of financial development that have the greatest impact on open innovation in 7 emerging countries. The analysis was performed featuring the MF-X-DMA method, as well as its further verification for autocorrelation and heteroscedasticity. The time period covers years from 2002 to 2020. The article states that the main indicators to improve financial development should enhance the process of bank lending and equity market development. An important area is the development of competition by providing equal access to information to all market participants in a continuously refining technical infrastructure. Regression analysis with the MF-X-DMA method confirms the statistical significance of this influence. The article fills the knowledge gap into the link between open innovations and the relatively low capitalization of the modern emerging countries’ financial market, low liquidity in small cap stocks at the financial market and concentration of the banking sector, as well as risks arising in the process of globalization. Another analysis has also been conducted by generating a novel fuzzy decision-making model. In the first stage, the determinants of open innovation-based fintech potential are weighted for the emerging economies. For this purpose, M-SWARA methodology is taken into consideration based on bipolar q-ROFSs and golden cut. The second stage of the analysis includes evaluating the emerging economies with the determinants of open innovation-based fintech potential. In this context, emerging seven countries are examined with ELECTRE methodology. It found the most significant factor is the open innovation-based fintech potential.

PurposeThe purpose of this paper is to examine the effect of digital financial innovation on financial depth and economic growth in Kenya.Design/methodology/approachThe study utilized autoregressive distributed lag (ARDL) model, which is preferable over other time series methods as the model allows application of co-integration tests to time series with different integration orders and is flexible to the sample size including small and finite.FindingsThe main findings of this paper are as follows: first, there is evidence of a positive relationship between digital financial innovation and financial depth with the strongest impact emanating from Internet usage and mobile financial services and the lowest impact from bank branches; second, the results reveal a significant positive impact of financial depth on economic growth consistent with the supply-leading finance theory.Practical implicationsThe results of the study imply a need for investment in technology-enabling infrastructure for digital financial services (DFS) and a redesign of strategies to avoid further financial exclusion of low-income earners due to the unaffordability of digital devices and financial and digital illiteracy.Originality/valueThe study is original and important for policymakers as the study provides insights on the components of financial innovation that are growth-enhancing in Kenya, considering that some aspects of innovation can be growth-retarding as was demonstrated during the global financial crisis.

An increase in energy crises and environmental degradation has pushed countries to adopt more sustainable practices. In this situation, financial technology has played an important role to lower carbon emissions by integrating renewable energy resources that can help increase renewable energy resource consumption (REC) and lower carbon emissions (CE). To better understand this transmission mechanism, this study has collected a panel dataset of 26 Morgan Stanley Capital International (MSCI) developing countries for the 2011–2021 period. Furthermore, a proxy indicator for financial technology (FinTech) was developed by extracting relevant data from CrunchBase. Pooled ordinary least square and robust fixed effects technique was adopted to analyse the influence of FinTech on renewable energy and carbon emissions for robustness. Results of the study show that FinTech development promotes renewable energy resource consumption (REC) and discourages carbon emissions (CE), moreover, economic growth positively impacts, and carbon emissions (CE). This research emphasizes the importance of adopting financial technology as an important deterrent of further environmental damage. Additionally, in line with the results of this study, policymakers should design and implement an industrial policy which promotes sustainable economic growth which can pave the path for a circular economy model in the future.

This study examines the role of financial development in shaping the relationship between macroeconomic volatility and long-term economic growth in a panel of 15 Economic Community of West African States (ECOWAS) countries over the period 1984–2019. The empirical analysis relies on the instrumental variable mean group (IVMG) estimator, which allows for cross-country heterogeneity in long-run dynamics. The results provide robust evidence of a negative and statistically significant effect of macroeconomic volatility on long-term growth in the region. Importantly, this relationship is shown to be conditional on the level of financial development, with deeper financial systems significantly mitigating the adverse growth effects of volatility. These findings suggest that policies aimed at strengthening domestic financial systems are critical for sustaining long-term growth in an environment characterized by frequent shocks. The results remain robust across a range of sensitivity analyses, including the use of a composite indicator of financial depth as well as the substitution of real GDP growth with per capita GDP growth and the computation of volatility using five-year rolling standard deviations.

Globally, information and communication technology play a pivotal role in driving the financial sector. This study examines the relationship between information communication technology and the financial sector in West Africa from 2012 to 2022. The study is essential because studies focusing on ICT and financial depth are scarce in West African nations. The data for the study comes from the World Bank database and uses the GMM system. The financial depth indicator is the ratio of bank assets to GDP while the indicators of ICT are internet subscription, mobile subscription and fixed broadband subscription.Mobile phone subscription significantly and statistically enhances financial depth of banks in West Africa by 423.82 % during the period under review. Internet subscription increases financial sector size by 11 % and the result is statistically significant. The fixed broadband positively influences the financial depth in West Africa by 341 %, and the result is statistically significant. Policymakers must invest heavily on ICT and adopt financial technology to promote financial depth.

Purpose – This paper aims to analyze the effect of financial depth in Islamic banks on income inequality in 33 provinces in Indonesia. Methodology – We use data for the period 2010-2018 from 33 provinces in Indonesia which are estimated using panel data to develop spatial panel data model. The dependent variable is income inequality, while the variable independent are Islamic regional financial depth, economic growth, human capital, and government expenditure.Findings – This research finds that Islamic Regional Financial Depth (FDS) has a positive and statistically significant direct effect on income inequality represented by Gini index. It means that an increase in the FDS will also cause an increase in the level of Gini index. In addition, the indirect effect of FDS on income inequality is also positive and significant, indicating that the ratio of financing to GRDP has a spillover effect on connected regions. Implications – This research recommends policymaker to expand the business of Islamic banking by financing the small medium enterprises and concern on the promotion of Islamic banking in the regional level. Originality – This study is potentially to contribute and be the early work which employs spatial analysis in the area of Islamic economics and finance. In addition, this study examines the impact of financial depth in Islamic bank on income inequality which is rarely discussed. Hence, this study presents relatively new information for policy makers, practitioners and researchers.

Purpose – This paper aims to analyze the effect of financial depth in Islamic banks on income inequality in 33 provinces in Indonesia. Methodology – We use data for the period 2010-2018 from 33 provinces in Indonesia which are estimated using panel data to develop spatial panel data model. The dependent variable is income inequality, while the variable independent are Islamic regional financial depth, economic growth, human capital, and government expenditure. Findings – This research finds that Islamic Regional Financial Depth (FDS) has a positive and statistically significant direct effect on income inequality represented by Gini index. It means that an increase in the FDS will also cause an increase in the level of Gini index. In addition, the indirect effect of FDS on income inequality is also positive and significant, indicating that the ratio of financing to GRDP has a spillover effect on connected regions. Implications – This research recommends policymaker to expand the business of Islamic banking by financing the small medium enterprises and concern on the promotion of Islamic banking in the regional level. Originality – This study is potentially to contribute and be the early work which employs spatial analysis in the area of Islamic economics and finance. In addition, this study examines the impact of financial depth in Islamic bank on income inequality which is rarely discussed. Hence, this study presents relatively new information for policy makers, practitioners and researchers.