Financial development and innovation: Do institutions and human capital matter?

Francis Atsu; Samuel Adams

Heliyon (Aug 2023)

Financial development and innovation: Do institutions and human capital matter?

Francis Atsu,
Samuel Adams

Affiliations

Francis Atsu: Department of Accounting and Finance, Business School, Ghana Institute of Management and Public Administration, P.O. Box AH 50, Achimota, Accra, Ghana; Corresponding author.
Samuel Adams: School of Public Service and Governance, Ghana Institute of Management and Public Administration, P.O. Box AH 50, Achimota, Accra, Ghana

Journal volume & issue: Vol. 9, no. 8
p. e19015

Abstract

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This paper explores the dynamic link between financial development and innovation, while accounting for human capital and institutional quality for 29 OECD countries spanning 40 years (1980–2019). The findings based on Generalized Method of Moments (GMM) and the Fully Modified Ordinary Least Squares (FMOLS) estimators show that trade, institutional quality, human capital and financial development promote innovation activities, while foreign direct investment has the opposite effect. Further, the findings show a non-linear relationship between finance and innovation.

Published in Heliyon

ISSN: 2405-8440 (Online)
Publisher: Elsevier
Country of publisher: United Kingdom
LCC subjects: Science: Science (General); Social Sciences: Social sciences (General)
Website: https://www.cell.com/heliyon/home

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