“Governance in action: transforming financial landscape through innovation among developing countries”
Using annual data from 78 developing countries between 2009–2023, we examine the effects of innovation on financial development, considering the moderating effect of corruption control and the channel effect of government effectiveness. Employing the System Dynamic Generalized Method of Moments (GMM...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2025-12-01
|
| Series: | Journal of Applied Economics |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/15140326.2025.2542766 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1849390279546634240 |
|---|---|
| author | Muhammad Nadir Shabbir Kainat Iftikhar Tanveer Bagh |
| author_facet | Muhammad Nadir Shabbir Kainat Iftikhar Tanveer Bagh |
| author_sort | Muhammad Nadir Shabbir |
| collection | DOAJ |
| description | Using annual data from 78 developing countries between 2009–2023, we examine the effects of innovation on financial development, considering the moderating effect of corruption control and the channel effect of government effectiveness. Employing the System Dynamic Generalized Method of Moments (GMM) for long-run cointegrated impact and Quantile regression for robustness, our findings reveal that innovation positively influences financial development. However, corruption control negatively moderates this relationship, and government effectiveness, while positively affected by innovation, negatively mediates financial development. The analysis also highlights heterogeneity between lower- and upper-middle-income countries. Innovation has a stronger positive effect on financial development in upper-middle-income countries, whereas the negative impacts of corruption control and government effectiveness are more pronounced in lower-middle-income countries. These results underscore the importance of effective governance in maximizing innovation’s benefits. Policymakers in developing countries should prioritize improving governance to create an environment conducive to innovation and sustainable financial development. |
| format | Article |
| id | doaj-art-ab1217dbaf624c989df79e62d3758a61 |
| institution | Kabale University |
| issn | 1514-0326 1667-6726 |
| language | English |
| publishDate | 2025-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Journal of Applied Economics |
| spelling | doaj-art-ab1217dbaf624c989df79e62d3758a612025-08-20T03:41:43ZengTaylor & Francis GroupJournal of Applied Economics1514-03261667-67262025-12-0128110.1080/15140326.2025.2542766“Governance in action: transforming financial landscape through innovation among developing countries”Muhammad Nadir Shabbir0Kainat Iftikhar1Tanveer Bagh2School of Economics and Finance, Xi’an university of finance and Economics, Xi’an, ChinaAccounting Department, School of Management, Xiamen University, Fujian, ChinaDepartment of Finance, School of Economics and Wang Yanan Institute for Studies in Economics, Xiamen University, Xiamen, ChinaUsing annual data from 78 developing countries between 2009–2023, we examine the effects of innovation on financial development, considering the moderating effect of corruption control and the channel effect of government effectiveness. Employing the System Dynamic Generalized Method of Moments (GMM) for long-run cointegrated impact and Quantile regression for robustness, our findings reveal that innovation positively influences financial development. However, corruption control negatively moderates this relationship, and government effectiveness, while positively affected by innovation, negatively mediates financial development. The analysis also highlights heterogeneity between lower- and upper-middle-income countries. Innovation has a stronger positive effect on financial development in upper-middle-income countries, whereas the negative impacts of corruption control and government effectiveness are more pronounced in lower-middle-income countries. These results underscore the importance of effective governance in maximizing innovation’s benefits. Policymakers in developing countries should prioritize improving governance to create an environment conducive to innovation and sustainable financial development.https://www.tandfonline.com/doi/10.1080/15140326.2025.2542766Financial developmentinnovationcontrol of corruptiongovernment effectiveness |
| spellingShingle | Muhammad Nadir Shabbir Kainat Iftikhar Tanveer Bagh “Governance in action: transforming financial landscape through innovation among developing countries” Journal of Applied Economics Financial development innovation control of corruption government effectiveness |
| title | “Governance in action: transforming financial landscape through innovation among developing countries” |
| title_full | “Governance in action: transforming financial landscape through innovation among developing countries” |
| title_fullStr | “Governance in action: transforming financial landscape through innovation among developing countries” |
| title_full_unstemmed | “Governance in action: transforming financial landscape through innovation among developing countries” |
| title_short | “Governance in action: transforming financial landscape through innovation among developing countries” |
| title_sort | governance in action transforming financial landscape through innovation among developing countries |
| topic | Financial development innovation control of corruption government effectiveness |
| url | https://www.tandfonline.com/doi/10.1080/15140326.2025.2542766 |
| work_keys_str_mv | AT muhammadnadirshabbir governanceinactiontransformingfinanciallandscapethroughinnovationamongdevelopingcountries AT kainatiftikhar governanceinactiontransformingfinanciallandscapethroughinnovationamongdevelopingcountries AT tanveerbagh governanceinactiontransformingfinanciallandscapethroughinnovationamongdevelopingcountries |