The Association between Financial Innovation and Economic Growth in E7 Countrıes: A Panel Causality Analysis

Abstract

Financial innovations, as one of the factors affecting the development of the financial system, contribute to the enhancement of economic development by increasing the efficiency of investments, savings and competitive advantage. Therefore, taking into account the effects of financial innovations on economic growth may increase policy effectiveness. On the other hand, economic growth may also boost the rise of financial innovations by improving the efficiency of the financial system. In this context, it is vital to determine the association between financial innovation and economic growth in terms of determining the factors that increase economic growth and supporting policies that increase economic competitiveness. The purpose of this paper is to investigate the interaction between financial innovation and economic growth in E7 countries using panel causality analysis. Findings revealed that financial innovation causes economic growth in China and Turkey whereas, economic growth causes financial innovation in Russia, Mexico and Indonesia when different indicators are taken into consideration. In other words, it is possible to boost economic growth by encouraging financial innovations in quantity and quality. In Russia, Mexico and Indonesia, on the other hand, economic growth is an encouraging factor for the rise of financial innovations.

Keywords

• Financial Innovation
• Economic Growth
• Panel Causality Analysis
• E7 Countries.

E7 Ülkelerinde Finansal Yenilik ve Ekonomik Büyüme İlişkisi: Bir Panel Nedensellik Analizi

Abstract

Finansal sistemin gelişimini etkileyen unsurların başında gelen finansal yenilikler, yatırımların verimliliklerini, tasarrufları ve rekabet avantajını artırarak ekonomik gelişmişliğin artırılmasına katkı sağlamaktadır. Dolayısı ile ekonomik büyüme politikalarının geliştirilmesinde finansal yeniliklerin olası etkilerinin de dikkate alınması uygulanan politikaların etkinliğini artırabilmektedir. Diğer yandan, ekonomik büyüme de finansal sistemin etkinliğini artırarak finansal yeniliklerin ortaya çıkışını teşvik edebilmektedir. Bu kapsamda, finansal yenilik ile ekonomik büyüme arasındaki ilişkinin belirlenmesi, ekonomik büyümeyi artıran faktörlerin ortaya konulabilmesi ve ekonomik rekabet gücünü artırıcı politikaların desteklenebilmesi açısından önem taşımaktadır. Bu çalışmanın amacı E7 ülkelerinde finansal yenilik ve ekonomik büyüme arasındaki ilişkinin panel nedensellik analizleri kullanılarak incelenmesidir. Elde edilen bulgular farklı göstergeler dikkate alındığında Çin ve Türkiye’de finansal yeniliklerin ekonomik büyümenin nedeni olduğunu, Rusya, Meksika ve Endonezya’da ise ekonomik büyümenin finansal yeniliklerin nedeni olduğunu göstermiştir. Bir başka ifade ile Çin ve Türkiye’de finansal yeniliklerin teşvik edilmesi ve finansal yeniliklerin nicelik ve nitelik olarak geliştirilmesi yolu ile ekonomik büyümenin artırılması mümkün gözükmektedir. Rusya, Meksika ve Endonezya’da ise ekonomik büyümenin finansal yeniliklerin ortaya çıkmasında teşvik edici bir unsur olduğu söylenebilir.

Keywords

• Finansal yenilik
• Panel Nedensellik Analizleri
• Ekonomik büyüme
• E7 Ülkeleri.

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