Financial Market Development Research Articles

The Rise of Digital Banking in the UK Financial Sector and Its Impact on Commercial Banks

In the contemporary financial domain, the emergence of digital banks has revolutionized operational models in traditional commercial banking. This article delves into how digital banks, through advanced technology and customer-centric services, compel commercial banks to revaluate their operational and regulatory frameworks. Specifically, it focuses on the digital banking market in the UK, analyzing how digitalization and technological progress are driving the evolution of competitive dynamics within the financial sector. As one of the worlds foremost financial hubs, the UKs trends in financial market development have profound implications for the global financial system. The British government and regulatory bodies have proactively adapted to these shifts, framing policies that facilitate innovation while ensuring security and compliance within digital banking. This backdrop sets the stage for this report to explore the transformative impact of digital banks on traditional banking models in the UK, aiming to understand the regulatory adaptations and the overall influence of digital entities on the conventional banking landscape.

Development of the bank of russia’s fast payment system in modern conditions

The financial market development in Russia and in the world is currently characterized by a number of processes such as emergence of a large number of new products and new formats implementation for their provision, expansion of the geography of financial institutions presence, national boundaries erasure in acquisition and provision of financial services, sales channels improvement for financial products and services, including remote ones, using modern information technologies. The article studies issues related to the current state and prospects of the fast payment system (hereinafter referred to as FPS) development considering the synergetic impact of payment services digitalization and sanctions restrictions. It analyzes the changes taking place in the FPS service in recent years, focusing on innovative business models, new functions implementation, technological transformations, as well as regulatory and risk aspects. The study pays special attention to the financial technology impact on development and functioning of the system as a key element of the payment industry. The potential of FPS in the context of ensuring the Russian payment infrastructure security represents an important direction for strengthening user confidence and system sustainability. The paper considers a number of promising areas for further development of FPSs, including their applicability to cross-border payments.

Savings and Sustainable Economic Growth Nexus: A South African Perspective

The savings behavior of individuals has been a topic of both macroeconomic and policy importance throughout history. Theoretical and empirical research shows that savings result from several demographic and economic factors working together to produce long-term, sustainable economic growth. This study therefore examined the nexus between domestic savings and sustainable economic growth in a South African perspective between 1990–2023, emphasizing the critical role that savings play in fostering long-term economic stability and environmental resilience. The ARDL framework was used to analyze data from the World Bank and the South African Reserve Bank. The results of the study demonstrate that corporate savings have a major effect on sustainable economic growth, especially over the long term. When corporate savings rise by 1%, the economy expands by 3.12%, which highlights the significant multiplier effect of investment. The extent of this impact depends on factors such as the efficiency of capital allocation, technological capacity, financial market development, government policies, and macroeconomic stability. These factors collectively determine how effectively corporate savings are transformed into productive investments that drive sustainable economic growth. Conversely, savings made by the government and the public, especially in the long run, have no appreciable impact on sustainable economic growth. Given that domestic savings mobilization is the most suitable channel for financing capital accumulation to support economic growth and development, the study suggests reviewing current policies to encourage domestic savings mobilization. This paper contributes to the broader discourse on sustainable economic policies in emerging markets, offering actionable insights for policymakers, financial institutions, and stakeholders promoting a more sustainable economic future for South Africa.

Развитие общего финансового рынка ЕАЭС: правовые аспекты

In the article, it was considered the areas of the development of the common financial market in the EAEU: expanding the list of countries participating in the forming of the com-mon financial market; deepening integration in those sectors and areas in which it is already taking place; inclusion of new sectors in the process of forming the common financial market. It is justified that the market of the digital currencies and financial assets will be a new sector of the common financial market in the EAEU in the future (along with banking, insurance and securities market).

Technological and financial development as drivers of Latin America's energy transition

Transitioning to clean energy is a challenge for Latin American countries whose socio-economic realities require economic development and environmental sustainability to be carefully balanced. To drive this energy transition, it is essential that funding and technological innovation align with local contexts. This study aims to assess the implementation of the energy transition in Latin America from 2015 to 2020. To do this a performance indicator is developed that uses Data Envelopment Analysis (DEA) and employs data on areas such as patents and financial development as inputs. Subsequently, a Fractional Regression Model (FRM) is used to explore the socio-economic factors influencing this performance and examine its determinants. The results demonstrate significant variations in energy transition outcomes across the sample, with Brazil and Peru consistently achieving maximum DEA scores. Financial development was found to attract capital for the energy transition, with Brazil leading in the Financial Markets Development Index during the period studied. High population density was found to negatively impact energy transition across all FRM model specifications. Negative correlations between gross fixed capital formation and the level of energy transition suggest that there is lower investment in renewable energy in countries with less efficient transitions. Additionally, investment in R&D was only positively and statistically significant in efficient countries.

Financial Market Development, Foreign Direct Investment and CO2 Emissions Nexus in Saudi Arabia: Asymmetrical Analysis

Financial Market Development, Foreign Direct Investment and CO2 Emissions Nexus in Saudi Arabia: Asymmetrical Analysis

Dynamic Impact of Digital Inclusive Finance and Financial Market Development on Forests and Timber in China: Economic and Social Perspective

This study investigates how digital inclusive finance, financial development, and technology influenced forest and timber outputs across 31 provinces in China from 2011 to 2021. The findings, derived from panel quantile regression analysis, indicate that digital inclusive finance significantly enhances forest economic output, particularly in regions with lower economic activity, by improving access to critical financial resources such as credit and investment. However, the positive effects diminish at higher levels of economic activity, suggesting potential diminishing returns. Through the marketization of credit distribution and diverse financial instruments, financial development is essential for promoting sustainable forestry practices and adopting new technologies. Based on the findings, the study suggests expanding digital financial services in areas with low forest activity to help people access credit and investments, boosting forest productivity. It also recommends improving financial markets and investing in new forestry technologies to support better forest management and timber production.

Exploring the stock market development and sustainable development nexus: insights from emerging market economies

PurposeSustainable development is considered a key factor in addressing environmental issues, global inequalities and poverty. This study aims to investigate the impact of stock market indicators on sustainable development across 16 emerging markets from 2003 to 2020.Design/methodology/approachThe research uses causality and cointegration analyses to explore the relationships between stock market indicators and sustainable development.FindingsUnivariate causality analysis reveals a bidirectional causal relationship between the stock market turnover ratio and sustainable development, as well as a unidirectional relationship from sustainable development to stock market capitalization and total value traded. Panel-level cointegration analysis suggests that only stock market capitalization has a weak positive influence on sustainable development. However, the impact of stock market indicators on sustainable development varies significantly among countries, as revealed by country-level cointegration analysis.Research limitations/implicationsWhile this study provides valuable insights, it is not without limitations. The findings are limited to the selected emerging markets and the specified timeframe (2003–2020). The complexity of factors influencing sustainable development suggests the need for further exploration in diverse contexts.Practical implicationsUnderstanding the nuanced relationships between stock market indicators and sustainable development can offer valuable insights for policymakers, investors and stakeholders.Originality/valueThis research contributes to the existing literature by examining the multifaceted connections between stock market indicators and sustainable development, focusing on country-specific causality relationships. The study highlights the reciprocal nature of this relationship, where financial market development can both influence and be influenced by a country's progress toward sustainability. This approach provides a more nuanced understanding of the complex interaction between stock market maturity and sustainability goals.

Analysis of the "Greenwashing" Phenomenon in the ESG Investment Environment

With the continuous development of the green financial market and the evolution of ESG reports, the corresponding "greenwashing" problems emerge in endlessly. This study takes ESG reports and enterprise greenwashing papers from 2022 as the object of analysis and reviews the research results in this field from the aspects of classification, causes, expression forms, influence and governance of greenwashing phenomena. According to the analysis. with the increasing scale of China's green finance market, the forms of greenwashing are gradually diversified. The imperfect information disclosure system, the asymmetry of market information and the more pursuit of short-term interests by enterprises are the main factors for the occurrence of greenwashing phenomenon. The impact of green analysis from consumer, corporate governance, gradually to the social and environmental level. Based on the above content, the research puts forward many governance opinions on greenwashing behavior, e.g., improving the system and unified standards from the government level as the perspective, strengthening information disclosure and news media supervision from the market perspective, strengthening internal governance from the perspective of enterprises, and improving the level of professional knowledge.

Green investments and inclusive growth: The case of the BRICS economies

Investments in green energy projects are highly critical to promoting climate transition and sustainable development. This objective motivates the investigation of the effect of green investments on inclusive growth. We develop an endogenous inclusive growth model that illustrates the channel through which private and public investments in green investments contribute to inclusive growth. By employing a dataset of the BRICS economies from 1990 to 2019, we fit both linear fixed-effects and fixed-effects threshold regression, the latter of which exhibits better prediction of green investment effects. Accordingly, the threshold regression estimates reveal that higher thresholds of green investments substantially accelerate inclusive growth in the BRICS economies. Furthermore, by controlling for the threshold role of financial sector development, we document the heterogeneous effects of green investments on inclusive growth. Unlike financial institutions’ development thresholds, a higher level of overall financial development and financial market development strengthens the positive role of green investments. Our findings offer impeccable policy actions to the governments and policymakers of the BRICS economies on pathways to promote green energy investments for sustainable development.

Financial Market Development and Bank Risk in GCC Countries

Financial Market Development and Bank Risk in GCC Countries

Regulatory Issues and Countermeasures in International Financial Markets

With the deepening of globalization, the development speed of capital markets is constantly accelerating, presenting a trend of globalization. At the same time, the emergence of multiple forms of trading platforms and diversified financial products further highlights the competitive relationship between security exchanges and other trading platforms. While promoting the transformation of security exchange forms in various countries, it also prompts governments to re-examine the financial regulatory system of securities markets. In this situation, it is very important to research the international financial market and financial regulatory system. This article explores the regulatory issues and countermeasures in the international financial market, intending to promote the stability and healthy development of the international financial market.

Foreign Direct Investment and Economic Growth in the Pacific Alliance countries

This article empirically analyzed the relationship between foreign direct investment (FDI) and economic growth (EG) in the Pacific Alliance countries. Quarterly data was used for each variable, and unit root tests, cointegration, and causality tests were applied. Additionally, a multivariate error correction model and impulse response functions were estimated. The main hypotheses were that FDI promotes the economic growth of the recipient countries and that economic growth contributes to attracting higher FDI flows. The results showed that in some countries, foreign investment promoted economic growth and, in turn, that EG contributed to attracting higher investment flows. However, in other cases, this relationship did not hold. These results suggest that factors such as infrastructure, financial market development, macroeconomic stability, institutional quality, and human capital are determinants of maximizing the benefits of FDI.

The impact mechanism of enterprise financialization on firm innovation

Financial market development provided enterprises with more financing options, which affected their innovation activities. This study is based on 1,274 manufacturing companies. We found a significant inverted U-shaped relationship between enterprise financialization and ambidextrous innovation, and financing constraints can negatively regulate this relationship. The inverted U-shaped impact was more significant in enterprises with large-scale financial backgrounds and low innovation willingness. This study provides targeted guidance for improving corporate innovation.

The characteristics of the new dual-cycle development pattern and systemic financial risk based on TVP-SVAR and MS-VAR model analyses

The new development pattern of the dual cycle is an important strategic deployment by the Chinese government in response to the complex and changing economic environment and a new stage of economic development. Based on the perspective of this new dual-cycle development pattern, this paper explores the time-varying nonlinear relationship between this new development pattern and systemic financial risk by constructing two models: the TVP-SVAR-SV and the MS-VAR. The empirical results show that, first, there was a significant negative impulse response effect between the new dual-cycle development pattern and systemic financial risk. The inhibitory effects of the domestic cycle and short-term pulse response were more significant than those of the international cycle and medium- and long-term pulse responses. In addition, the inhibitory effect of the new dual-cycle development pattern on systemic financial risk exerted different impact effects at different timepoints, with significant variability. Second, there was a significant nonlinear relationship between the new development pattern and systemic financial risk. The MSIH(2)-VAR(1) model identified two regional states: the financial risk release stage and the financial risk accumulation stage. This effect lasted longer in zone 2 (financial risk accumulation phase), with a sample size of more than 60 % of the total sample and a duration of 6.12. Third, in the impulse response analysis of different zones, a mutually reinforcing effect was found between the domestic and international cycles, and both exerted a significant suppressive effect on systemic financial risk, which was more significant in zone 1. The findings of this paper have important theoretical and practical significance for constructing and perfecting the new dual-cycle development pattern, promoting the high-quality development of China's financial market, and preventing the accumulation and occurrence of systemic financial risk.

Financial market participation, household asset choices, and resident well-being: An empirical analysis of China family panel studies data

As a fundamental unit of economic society, family participation is crucial for promoting financial market development and social progress. This study empirically tested the impact of residents’ household financial market participation on their well-being using Chinese micro-household data. The findings show that residents’ participation in financial markets can significantly enhance their well-being. The choice of household assets played a significant positive moderating role in financial market participation on residents’ well-being. Further analysis indicates that marketization and urban residency positively mediated the effects of financial market participation on residents’ well-being.

Environmental impact of financial Market's development in Australia

Enhancing environmental quality has become one of the most commonly discussed topics in the modern world, particularly in response to the challenges posed by the increasing threats to climate change. The financial system is acknowledged as a crucial factor in achieving environmental quality by facilitating the flow of financial resources. This study aims to examine the impact of a unique aspect of the financial system—financial market development—on environmental quality in Australia. What sets this study apart from existing works is its comprehensive approach, capturing broader measures of financial market development, including financial market depth, access, efficiency, and stability. By employing the Autoregressive Distributive Lag (ARDL) model over the period from 1983 to 2021, our research demonstrates a positive impact of market-based financial development on Australia's environmental quality by reducing greenhouse gas emissions in the long run. Specifically, an opposing impact of financial market development on environmental quality is evident in the short run. Our findings highlight that financial market development degrades environmental quality in the short run by contributing to increased greenhouse gas emissions, which further emphasizes the importance of integrating both the positive and negative effects of financial market development in policymaking, particularly in the context of achieving Australia's environmental targets.

Common Financial Market of the EAEU: Concept, Structure and Problems of Formation

Aim. The purpose of the study is to substantiate the concept and structure of the common financial market of the Eurasian Economic Union, highlight the problems of its formation and ways to solve them. Tasks. The objectives of the study are: review and analysis of the definitions of the common financial market in the legal framework of the Eurasian Economic Union; highlighting key aspects of the development of the common financial market; defining its structure, problems of formation, proposing ways to solve them.Methods. Methods were used: institutional analysis, comparative analysis, system analysis to substantiate aspects of the formation and structure of the common financial market of the Eurasian Economic Union. The method of formal logical analysis was also used to clarify the concepts of the common financial market in various acts of the integration level.Results. Firstly, at the level of the Eurasian Economic Union, the concept and criteria of a common financial market have been established.Secondly, a broad and narrow understanding of the structure of the common financial market in the context of Eurasian integration is highlighted.Thirdly, the key aspects of the development of the common financial market are: expanding the range and accessibility of financial services; ensuring the rights of consumers of financial services and investors; security and transparency of financial services.Fourthly, the problems of forming a common financial market are highlighted, including the different levels of development of the markets of the integration member states, the weak sector of the securities and investment markets.Conclusions. The common financial market is part of Eurasian integration, the processes of formation of such a market are components of integration processes. The structure of the general financial market in the narrow sense includes the banking and insurance services sector, the securities market sector, and the relations between these sectors. A broad understanding of the structure of the general financial market additionally includes the tax, budget and currency areas.

The impact of judicial prejudice in bankruptcy on creditors and local financial development

In this research, we explore the implication of judicial prejudice in bankruptcy for creditor interests and local financial market development. Based on prefecture-level data, we find compelling evidence that judicial prejudice leads to capital market frictions. Regions with stronger judicial prejudice have higher borrowing costs. Moreover, judicial prejudice is negatively related to local financial market development. In sum, our research sheds light on the impact of judicial prejudice on financial market development.

Institutional determinants of dividend policy of African listed firms

ABSTRACT This paper examines the institutional determinants shaping the dividend policy of 357 non-financial firms listed across 13 African markets. Utilising panel data estimation techniques, our findings indicate that weaker investor protection, increased financial development, high GDP growth, and greater press freedom are linked to higher dividend payouts, while corruption and property rights protection show no significant effects. Notably, financial market development positively impacts dividend policy, whereas the development of financial institutions does not. Policymakers should prioritise several key areas: strengthening investor protection to encourage diverse value creation and improve governance; enhancing financial market development to increase capital access and market efficiency; supporting press freedom to promote transparency and accountability; and fostering GDP growth to improve firm performance and boost dividend distributions. A balanced approach integrating financial development, press freedom, and economic growth is essential for optimising dividend policies and advancing sustainable economic development in Africa.