Version 1
: Received: 18 November 2020 / Approved: 18 November 2020 / Online: 18 November 2020 (23:53:19 CET)
How to cite:
Jia, Z.; Hajdari, B.; Khalid, R.; Wei, J.; Qamruzzaman, M. Economic Policy Uncertainty and Financial Innovation: Is There Any Affiliation?. Preprints2020, 2020110491. https://doi.org/10.20944/preprints202011.0491.v1
Jia, Z.; Hajdari, B.; Khalid, R.; Wei, J.; Qamruzzaman, M. Economic Policy Uncertainty and Financial Innovation: Is There Any Affiliation?. Preprints 2020, 2020110491. https://doi.org/10.20944/preprints202011.0491.v1
Jia, Z.; Hajdari, B.; Khalid, R.; Wei, J.; Qamruzzaman, M. Economic Policy Uncertainty and Financial Innovation: Is There Any Affiliation?. Preprints2020, 2020110491. https://doi.org/10.20944/preprints202011.0491.v1
APA Style
Jia, Z., Hajdari, B., Khalid, R., Wei, J., & Qamruzzaman, M. (2020). Economic Policy Uncertainty and Financial Innovation: Is There Any Affiliation?. Preprints. https://doi.org/10.20944/preprints202011.0491.v1
Chicago/Turabian Style
Jia, Z., Jianguo Wei and Md Qamruzzaman. 2020 "Economic Policy Uncertainty and Financial Innovation: Is There Any Affiliation?" Preprints. https://doi.org/10.20944/preprints202011.0491.v1
Abstract
The study's motivation is to gauge the nexus between economic policy uncertainty and financial innovation for the period 2004M1 to 2018M12 in BRIC nations. For establishing a long-run cointegration study applied Autoregressive Distributed Lagged (ARDL) and asymmetry effects of economic policy uncertainty investigated following nonlinear framework known as NARDL. Furthermore, directional causality is established by performing a non-granger causality test. Cointegration test results of Fpss, Wpss, and tBDM confirmed the long-run association between EPU and financial innovation. On the other hand, the Wald test results proved asymmetry effects furring from EPU to financial innovation both in the long-run and short-run. Referring to asymmetry effects that positive and negative shocks in financial innovation, the study revealed that negative linkage between shocks in EPU and financial innovation in the long-run but short-run effects are insignificant. Furthermore, financial innovation measured by R&D investment exhibits positive linked with shocks in EPU, implying that uncertainty induces innovation in the economy. Refers to directional causality estimation, the study revealed evidence supporting the feedback hypothesis between EPU and financial innovation in all sample countries.
Business, Economics and Management, Accounting and Taxation
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
