Bank of Finland study finds positive innovation channel
A Bank of Finland paper, published on Friday, shows that more efficient utilisation of technological innovations can aid financial developments and play a positive role in economic growth.
Pasi Ikonen, the paper's author, examines whether financial development affects economic growth through more efficient utilisation of technological innovations.
The hypothesis is based on the notion that the better functioning financial markets are, the higher the probability is that a high-quality technological innovation finds the necessary finance to realise its potential for growth.
The study finds a significant and positive relationship between innovation and financial development, and suggests that the innovation channel of finance has a positive role to play in economic growth. However, Ikonen notes the magnitude of the gains innovation implies that this role of the channel is not decisive.
Click here to read the paper
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