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Open AccessArticle

Is Financial Innovation Bestowed or a Curse for Economic Sustainably: The Mediating Role of Economic Policy Uncertainty

1
School of Philosophy and Social Development, Shandong University, Jinan 73200, China
2
School of Business and Economics, United International University, Dhaka 1212, Bangladesh
3
Department of Accounting, College of Business Administration, Al-Kharj, Prince Sattam Bin Abdulaziz University, Al-Kharj 11942, Saudi Arabia
*
Author to whom correspondence should be addressed.
Academic Editor: Bruce Morley
Sustainability 2021, 13(4), 2391; https://doi.org/10.3390/su13042391 (registering DOI)
Received: 26 January 2021 / Revised: 19 February 2021 / Accepted: 19 February 2021 / Published: 23 February 2021
The study’s motivation is to gauge the impact of financial innovation on economic growth from 2004M1 to 2018M12 in India and Pakistan’s economy with the mediating role of economic policy uncertainty. For instituting the possible association between financial innovations, economic policy uncertainty, and economic growth study considered both symmetric and asymmetric frameworks following autoregressive distributed lagged (ARDL) and nonlinear ARDL (NARDL). Furthermore, asymmetric causal relationships were evaluated by performing non-granger causality tests with asymmetric shocks of financial innovation and economic policy uncertainty (EPU). The results of Fpss, Wpss, and tBDM under symmetry framework established the long-run link between EPU, financial innovation, and economic growth in both countries. The results of standard Wald tests demonstrated the asymmetry effects furring from EPU to economic growth and financial innovation to economic growth both in the long-run and short-run. The asymmetry effects of positive and negative shocks in financial innovation revealed a positive linkage with economic growth and a negative tie between asymmetric shocks in EPU and economic growth in the long-run, but short-run magnitudes negligible. Refers to directional causality estimation, the study revealed evidence supporting the feedback hypothesis between EPU and financial innovation in all sample countries. View Full-Text
Keywords: financial innovation; economic policy uncertainty; economic growth; ARDL; NARDL; Toda–Yamamoto financial innovation; economic policy uncertainty; economic growth; ARDL; NARDL; Toda–Yamamoto
MDPI and ACS Style

Xu, S.; Qamruzzaman, M..; Adow, A.H. Is Financial Innovation Bestowed or a Curse for Economic Sustainably: The Mediating Role of Economic Policy Uncertainty. Sustainability 2021, 13, 2391. https://doi.org/10.3390/su13042391

AMA Style

Xu S, Qamruzzaman M, Adow AH. Is Financial Innovation Bestowed or a Curse for Economic Sustainably: The Mediating Role of Economic Policy Uncertainty. Sustainability. 2021; 13(4):2391. https://doi.org/10.3390/su13042391

Chicago/Turabian Style

Xu, Shuhua; Qamruzzaman, Md.; Adow, Anass H. 2021. "Is Financial Innovation Bestowed or a Curse for Economic Sustainably: The Mediating Role of Economic Policy Uncertainty" Sustainability 13, no. 4: 2391. https://doi.org/10.3390/su13042391

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Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

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