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Article

Impact of Financial Innovation and Institutional Quality on Financial Development in Emerging Markets

by
Suha Mahmoud Alawi
1,
Wajih Abbassi
2,
Rukhma Saqib
3,* and
Madeeha Sharif
3
1
Finance Department, Faculty of Economics and Administration, King Abdulaziz University, Jeddah 21422, Saudi Arabia
2
College of Business and Economics, Qassim University, Buraydah 52571, Saudi Arabia
3
Bahria Business School, Bahria University, Islamabad 44000, Pakistan
*
Author to whom correspondence should be addressed.
J. Risk Financ. Manag. 2022, 15(3), 115; https://doi.org/10.3390/jrfm15030115
Submission received: 15 January 2022 / Revised: 16 February 2022 / Accepted: 17 February 2022 / Published: 2 March 2022
(This article belongs to the Special Issue Advances in Sustainable Accounting and Finance)
Versions Notes

Abstract

Financial innovation and institutional quality play a key role in financial development. This study investigates the impact of financial innovation and institutional quality on financial development in an emerging markets setting. We used the sample of 17 emerging markets based on the availability of data from the period 1990–2020. Data were extracted from the World Development Indicator database. In this study, panel unit root, fully modified ordinary least squares and Pedroni Integration tests were applied to analyze the data. We find that financial innovation and institutional quality are significantly and positively related to financial development. Better financial innovation increases financial development, whereas low institutional quality in an emerging market can deteriorate financial development.
Keywords: financial development; institutional quality; financial innovation; emerging markets financial development; institutional quality; financial innovation; emerging markets

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MDPI and ACS Style

Alawi, S.M.; Abbassi, W.; Saqib, R.; Sharif, M. Impact of Financial Innovation and Institutional Quality on Financial Development in Emerging Markets. J. Risk Financ. Manag. 2022, 15, 115. https://doi.org/10.3390/jrfm15030115

AMA Style

Alawi SM, Abbassi W, Saqib R, Sharif M. Impact of Financial Innovation and Institutional Quality on Financial Development in Emerging Markets. Journal of Risk and Financial Management. 2022; 15(3):115. https://doi.org/10.3390/jrfm15030115

Chicago/Turabian Style

Alawi, Suha Mahmoud, Wajih Abbassi, Rukhma Saqib, and Madeeha Sharif. 2022. "Impact of Financial Innovation and Institutional Quality on Financial Development in Emerging Markets" Journal of Risk and Financial Management 15, no. 3: 115. https://doi.org/10.3390/jrfm15030115

APA Style

Alawi, S. M., Abbassi, W., Saqib, R., & Sharif, M. (2022). Impact of Financial Innovation and Institutional Quality on Financial Development in Emerging Markets. Journal of Risk and Financial Management, 15(3), 115. https://doi.org/10.3390/jrfm15030115

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