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Journal of Business and Socio-economic Development

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Linear and non-linear ARDL estimation of financial innovation and economic growth in Ghana

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Published in Journal of Business and Socio-economic Development. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

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Abstract

Purpose

This study aimed to explore the effect of Financial Innovation (FI) on economic growth in Ghana, with a dataset spanning 1960–2019, adopting a broader conceptualization of FI as the ratio of broad money to narrow money.

Design/methodology/approach

The study employs a non-linear autoregressive distributed lag (ARDL) time series econometric model to estimate data from the World Bank (1960–2019).

Findings

There is no evidence that FI significantly impacts economic growth. This could be due to the early and strict regulation of the financial technology (FIN-TECH) sector and the general inconclusiveness of the impact of financial development on economic growth.

Practical implications

Policymakers must empirically explore the impact of early and strict regulation on the transformational impact of FI.

Originality/value

The paper is among the first to apply a broader conceptualization of FI in estimating the impact of FI on economic growth.

  • ISSN: 2635-1374
  • e-ISSN: 2635-1692
  • Online date, start – end: 2021
  • Copyright Holder: Ahlia University
  • Open Access: open access
  • Editor: Professor Allam Hamdan

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