Factors Influencing the Growth of Financial Innovation

Student: Kabzhalelov Asan

Supervisor: Egor Krivosheya

Faculty: International College of Economics and Finance

Educational Programme: Double degree programme in Economics of the NRU HSE and the University of London (Bachelor)

Final Grade: 7

Year of Graduation: 2020

This paper studies country-level factors influencing the growth of financial innovation. The list of those factors consists of four groups: social, technological, economic/financial, and political. Financial innovation is measured by a proxy variable of R&D expenditures on financial and insurance activities. As a result of the analysis of the sample of 32 countries for the period from 1987 to 2017, the evidence of positive statistically significant relation between the group of technological factors and financial innovation is obtained. At the same time, there is no evidence of significance of other groups of factors. Moreover, as a result of using generalized method of moments estimator, it is established that past level of financial innovation has a positive and significant effect on its current level.

Full text (added June 11, 2020)

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