Financial Development, Innovation, and Economic Growth: The Case of Selected Asian Countries
We empirically examine the effect of financial sector development on economic growth by taking into account innovations for the sample of twelve Asian countries. We estimate panel data model by applying random effects estimator. We use balance panel data over the time period of 1995 to 2016. Our study provides significant evidence that in the presence of innovation, economic growth declines with financial development. However, innovation and financial development both are positively related to economic growth. Other variables namely the rate of inflation and the domestic saving to GDP ratio also appear significant in determining economic growth in the selected countries during the examined period.
Keywords: Economic Growth, Innovation, GDP, Domestic saving, Inflation, Panel data, Random effect model