Distribution Of Financial Resources Research Articles

Climate change, corporate risk-taking, and financialization: evidence from Chinese A-share non-financial listed companies

AbstractClimate change-induced risks, such as global warming, can affect the economic development of entities and, consequently, the stability of financial markets. Businesses are progressively making the transition to green in order to lessen the negative consequences of climate threats. This study examines the relationship between corporate risk-taking (CRISK) and financialization (FIN) in light of climate change. The impact of business risk-taking on financialization is experimentally investigated through the transmission chain of “CRISK - enterprise value – FIN” using a fixed-effects model. The study also analyzes the moderating effect of climate change on the direct and indirect channels of climate change by using “temperature” and “investors’ concern about climate,” respectively. In addition, the empirical results are tested for robustness using propensity score matching and an instrumental variable method. This study’s findings reveal the following key insights. First, CRISK significantly enhances FIN by improving firm value. Second, enterprises with high financing constraints and manufacturing enterprises are more likely to have a positive correlation between CRISK and FIN. Third, the relationship between CRISK and FIN is enhanced by the direct transmission channel of increasing climate risk, but the indirect transmission channel is not significant. This study proposes policy recommendations to address the effect of climate risk on CRISK and FIN. Among these suggestions are the prudent distribution of financial resources among enterprises according to their level of risk-taking and the reinforcement of regulatory authorities’ financial oversight of businesses with high financing constraints and the manufacturing sector. By implementing these policies, companies can better manage climate-related risks and contribute to financial stability.

Improvement of financial management tools of agricultural enterprises

Financial management of agricultural enterprises, like any other direction of managerial activity, is a complex system consisting of many interdependent elements that collectively determine the financial stability of the subject. The authors defined the principles of financial management in the system of management activities: the principle of complexity after the adoption of management decisions, the principle of variability of approaches to the development of management decisions, the principle of dynamism of management decisions, the principle of compliance of management decisions with the strategic goals of the enterprise. It has been established that the main goal, the achievement of which is aimed at managerial decisions within the framework of financial management, is to guarantee the financial stability of agricultural enterprises based on the organization of the competent distribution of financial resources, their use and movement, and that at the current stage of the development of economic relations, an important factor in increasing the competitiveness of agricultural enterprises enterprises are using digital products that allow automating the management system of business entities. It was found that in order to increase the efficiency of the financial management system, agricultural enterprises need to improve financial resources management tools, one of which is the implementation of the Enterprise Resource Planning System (ERP-system), which automates management activities. The use of such software products will allow: at the enterprise level – to improve the general financial condition and timely neutralization of threats capable of weakening the financial stability of entities; at the level of the national economy – to guarantee the financial security of the state. Improving the financial management system of agricultural enterprises based on the implementation of the ERP software product will allow to increase the effectiveness of management decisions in the field of financial resource management and, accordingly, significantly strengthen their financial stability.

Financing education spending in the context of interbudgetary relations in the Republic of Kazakhstan

In the current conditions, education is endowed with strategic importance as a sphere of social activity that directly forms the level of intelligence of the population, ensuring competitiveness and innovation in the development of the country's economy. Therefore, the study’s relevance is because the educational capital obtained in the learning process is a combination of theoretical knowledge, practical skills, work experience, and personal characteristics that bring a person income during his career and stimulate further investment in education. Education impacts each citizen’s income and directly affects the economic development of the country, its financial capabilities, and national competitiveness. Thus, this article aims to reveal the critical aspects of republican and local financing of education in Kazakhstan and the prospects for its development. The methodological basis of the research is formed by a system of general scientific and unique research methods: synthesis, system-analytical analysis, and abstract-logical method. The critical result of the work is the systematization of acquisitions within the framework of the researched topic and the study of the features of optimizing the decentralization of education financing in Kazakhstan. Proposed: to increase the efficient distribution of financial resources at all levels of the budget system; increase the opportunities for educational institutions to raise additional funds through educational innovations, expand the list of paid services provided by such institutions; carry out decentralization of education, taking into account the characteristics of the regions, their production potential, the demographic situation and the interests of territorial communities. The results of this scientific study, as well as the conclusions formulated on their basis, are of significant importance both for the scientific community and for financial experts and practitioners from the educational field since they have a structured presentation of the material based on which logical and constructive conclusions are drawn, which may have an impact on the subsequent processes of reforming the financial provision of education in Kazakhstan.

The Influence of Regional Socioeconomic Features On the Distribution of Financial Resources For Higher Education

The article is devoted to solving the problem of “budgetary financial adequacy of higher education” in China through a fairer, uniform, and sufficient distribution of financial costs for higher education among the provinces of this country, considering significant differences in the natural, economic, and social conditions of development in various regions. Currently, in China, the calculation of standard financial costs for the education sector is carried out according to the legal requirements of the Budget Department of the Ministry of Finance, taking into account the number of people studying at the corresponding level of education, the cost norm for this level of education, and the deviation coefficient. Instead, this article proposes a more comprehensive and rational approach that considers regional differences in the cost of living and the financial burden on higher education institutions, increasing the government’s responsibility for supporting a balanced distribution of financial resources for higher education. To take into account regional differences, it is proposed to use a system of indices for the difference in the costs of regional development, which includes three main categories of indicators: natural factors (the complexity of the terrain and the share of the area planted with forests), economic factors (the index of prices for raw materials, GDP per capita, freight traffic, and the total duration of operation of urban public transport), and social factors (population density in municipal areas, number of graduates of general education colleges and universities). To determine the fair size of budgetary expenditures on higher education, it is proposed to make adjustments to the index of differentiation of regional development expenditures, which combines these indicators using the geometric regression average benchmark method (without including a constant term). A higher value of this index means that the region needs more resources to achieve the same level of development as another region, so the standard budget expenditures for higher education should be higher for it. For all provinces in China, the coefficient of financial adequacy of higher education was calculated as the ratio between the standard financial costs of higher education (calculated according to the proposals outlined in this article) and the actual costs incurred. It is proposed that this coefficient be used as a basis for optimizing their distribution. The article emphasises the need to form a strategy for financing higher education in China, which should be based on a dynamic permanent adjustment of the amount of allocated financial resources depending on changes in the regional social and economic conditions of development of each province, an effective institutional mechanism that would allow adapting this strategy to endogenous and endogenous changes in China’s economy, optimisation of horizontal transfer payments and partnership assistance programs, and incentive mechanisms for local governments to invest in higher education.

Роль финансово-кредитных механизмов в обеспечении устойчивого развития Республики Адыгея

The presented study analyzes the main sources of financial resources that are necessary for the effective and sustainable development of territories. Currently in Russia there is uneven distribution of financial resources, the bulk of which is concentrated in several large federal centers, while the remaining territories often experience a significant shortage of financial resources, which does not allow the regions to reach their full economic potential. This issue becomes especially relevant in conditions of macroeconomic turbulence and emerging trends in the deglobalization of the world economy. The purpose of the study is to analyze the main financial and credit mechanisms used to support the economic development of the Republic of Adygea, existing programs and projects to attract investment, as well as problems and prospects for further development of the financial sector in the region. The study is based on the use of a system-functional approach. During the research process, general scientific methods and techniques were used, as well as private methodological tools for economic developments. In the course of the analysis, the authors identified the existing problems of financing the economy of the region, identified growth points, and substantiated the concept confirming the need to create and develop an effective financial and credit mechanism in the regions due to the objective need to decentralize management in the country, providing regions with greater economic independence.

Trend of Corporate Social Responsibility Spending by Public Sector Organisations: Evidence from Water Supply and Sanitation Authority in Tanzania

Background: Corporate Social Responsibility (CSR) has gained prominence as organisations increasingly recognise their role in contributing to social and environmental well-being. This study focuses on the CSR spending trends of Public Water Supply and Sanitation Authorities (WSSAs) in Tanzania, shedding light on their commitment to sustainable development through social and environmental initiatives. Objective: The study aim was to assess the trends of CSR spending by WSSAs in Tanzania over a five-year period (2015-2019). Specifically, the study aims to identify areas of CSR investment and assess the distribution of financial resources among various CSR activities undertaken by WSSAs. Method: Secondary data from 114 WSSAs were analysed using descriptive methods, specifically the line graphs to show CSR spending trends, and paired t-tests gauged significant changes over the five years. Results: The study finding reveals a gradual increase in CSR spending by WSSAs in Tanzania from 2015 to 2019. This upward trend indicates a sustained dedication to fulfil social and environmental responsibilities, contributing to the broader goal of sustainable development. The study also indicates a preference for directing CSR resources towards social-oriented activities. Notably, the highest spending was observed in local educational programmes and health services, while the lowest spending was observed on sports and cultural festivals. Conclusion: The study emphasises fostering policies to encourage ongoing CSR spending by WSSAs, especially in impactful education and health areas. Collaborative frameworks with local communities can address social and environmental challenges, aligning initiatives with community needs for holistic regional development. Keywords: Corporate social responsibility spending, Public sector organisations, Tanzania

Legal regulation of formation of budgets of united territorial communities as key subjects of local self-government

This article is devoted to the study of certain aspects of the formation of local self-government budgets, namely united territorial hromadas. It is summarized that the armed actions of the aggressor led to a deep economic crisis in Ukraine, which affected the financial capacity of the state as a whole and local self-government bodies, in particular.
 Attention is focused on the fact that with the beginning of a full-scale invasion, the process of approving the budget of local self-government has undergone certain changes: the heads of the respective territorial communities can dispose of the funds of local budgets only in the territory where hostilities are not conducted and the military administration of the settlement (settlements) is not formed. The amendments to the Budget Code of Ukraine related to the payment of personal income tax by military personnel are analyzed. Attention is paid to the content of these innovations, namely, to direct to the state budget revenues from the paid tax on the income of an individual from payers- military personnel. It is noted that these changes should contribute to a more efficient distribution of financial resources, in particular, to influence the state's ability to purchase drones and weapons to ensure the country's defense capability.
 Particular attention was paid to the issues of formation of local budgets, their distribution and use. It is emphasized that the process of decentralization of power, proposed by the government to meet the financial needs of hromadas, is based on local budgets, which will ensure financial independence and personalize responsibility for the consequences of ineffective management of local finances. It is emphasized that the successor of the property and duties of territorial communities are the communities themselves, but according to the innovations, the remaining funds received from the community budget over the past year will be directed to activities related to Russia's armed aggression against Ukraine.
 The article focuses on the importance of ensuring transparency in spending budget funds and the right of communities to establish their own mandatory procedures for ensuring publicity in managing local finances.

Financial Management Challenges in Georgia’s Higher Education Institutions

The effective management of financial resources in higher education institutions significantly impacts the overall system’s functionality. The role of education and scientific development in a country’s economic progress cannot be overstated. Georgia possesses the potential to achieve economic growth through its intellectual and educated human capital. However, despite recent reforms, the education system grapples with persistent shortcomings and challenges, hindering the creation of well-prepared and competitive graduates. Strengthening the education system is essential for Georgia to thrive in the global arena. While funding for education has increased over the years, mere financial inflow does not necessarily correlate with improved educational quality. To address this, a strategic and tactical approach to reform, along with efficient distribution of financial resources, is crucial. This paper investigates the impact of existing funding policies on Georgia’s higher education system. It delves into the structure and dynamics of funding for higher education institutions, examining the nature and significance of previously funded projects. Additionally, the study discusses and analyzes the role of education reforms in promoting overall development. Drawing on both qualitative and quantitative analyses, the recommendations put forth within this framework aim to empower stakeholders in overcoming the challenges faced by Georgia’s higher education landscape.

Unveiling The Nexus: Exploring the Impact of Behavioral Finance on Green Finance Initiatives

This research paper delves into the dynamic landscape of global climate finance during the fiscal years of 2021/2022, examining the collaborative efforts of public and private actors in addressing the multifaceted challenges posed by climate change. The equitable distribution of financial resources reflects a shared commitment to transformative action, with a focus on critical sectors such as energy, transport, and buildings and infrastructure. Both sectors emphasize the transition to renewable energy, sustainable transportation, and climate-resilient urban development. Public finance plays a pivotal role by directing support to relatively underserved sectors, including Agriculture, Forestry, and Other Land Use (AFOLU), water and wastewater management, and industry. This targeted intervention ensures inclusivity in climate action and contributes to broader sustainable development goals. The financial commitments not only reduce carbon footprints but also foster innovation, job creation, and economic resilience. The collaborative model of climate finance observed during this period sets a precedent for future endeavors, emphasizing a holistic and inclusive approach. The research suggests potential avenues for future studies, such as assessing the long-term impact of climate finance, evaluating evolving patterns in public-private collaboration, and exploring the integration of climate finance within global policy frameworks. Ultimately, this research contributes to the ongoing discourse on climate resilience, offering insights into the interconnectedness of financial commitments, sustainable development, and the global fight against climate change.

HEALTHCARE MANAGEMENT TOOLS

Pharmaceutical Assistance has evolved over time and requires a reorganization of management practices. Considering professional experience and working in this area in the State, it was found that the Pharmaceutical Assistance that has been developed in Alagoas has presented some difficulties. Considering that a National Pharmaceutical Assistance Management System was adopted at national level as a management tool, the question arises: “What are the main difficulties encountered in the effective implementation and use of the National Pharmaceutical Assistance Management System as a management tool? control of financial resources invested in the medication acquisition and distribution processes? ” To answer the initial question, the following objective was defined: to evaluate the impacts of the implementation of the National Pharmaceutical Assistance Management System in the State of Alagoas as a Management Tool. In order to achieve the goal, it was decided to develop qualitative and quantitative research as a methodology. Taking into account the results obtained after the research carried out with 90 pharmaceutical professionals working in the health districts of the State of Alagoas, it was possible to verify that the implementation of the HÓRUS system in the State has contributed to the adequate management of the pharmaceutical system, especially in which refers to a better distribution of financial resources for the acquisition of medicines, serving a greater number of people. However, some problems for the adequate implementation of the system were pointed out by the pharmaceutical professionals interviewed, among these, the fact that the system does not have a tab with manual or instructions – to resolve situations that occur routinely – and a shortage of human resources.

НИЗКАЯ ЭФФЕКТИВНОСТЬ МЕЖБЮДЖЕТНЫХ ТРАНСФЕРТОВ В РОССИЙСКОЙ ФЕДЕРАЦИИ

The scientific article is devoted to the problem of low efficiency of interbudgetary transfers in the public finance system of the Russian Federation. The study is conducted to identify the main factors influencing the low efficiency of transfer of funds between different levels of the budget system, and to develop recommendations for improving this situation. The authors draw attention to the imbalance in the distribution of financial resources between different regions, which creates problems in ensuring the socio-economic development of less developed territories. The rest of the article analyzes the reasons underlying the low efficiency of intergovernmental transfers. Factors include insufficient transparency in the distribution of funds, a complex system for distributing mandatory expenses, as well as problems of corruption at the level of regional and local authorities. Particular attention is paid to financial management models that promote more efficient use of budget resources at the local level. In addition, the article emphasizes the importance of the participation of public organizations, experts and representatives of the business community in the process of discussion and decision-making on issues of interbudgetary transfers. Active involvement of civil society can contribute to more transparent and responsible use of budget funds. In conclusion, the article puts forward the idea of the need for an integrated approach to solving the problem, which includes changes in legislation, strengthening the institutional framework, as well as training and support for regional and local authorities in order to increase their efficiency in managing budget resources. Thus, this scientific article offers extensive analysis and constructive proposals for improving the efficiency of intergovernmental transfers in the Russian Federation, taking into account the multidimensional aspects affecting this problem.

СТАН ТА ПЕРСПЕКТИВИ РОЗВИТКУ ПРОТЕЗНОЇ ГАЛУЗІ В УКРАЇНІ В КОНТЕКСТІ ВИКОНАННЯ ЗАВДАНЬ СОЦІАЛЬНОЇ ПОЛІТИКИ ВОЄННОГО ЧАСУ

The consequence of any war is the appearance of a large number of injured civilians and military personnel. In 2009, Ukraine signed the UN Convention "On the Rights of Persons with Disabilities" and confirmed guarantees regarding the provision of persons with disabilities with rehabilitation aids and their social inclusion. The purpose of the article is to highlight the results of the research, which are related to the state policy of development of the field of prosthetics in the context of ensuring the rights of people with disabilities, their rehabilitation and social inclusion. The relevance of the problem under consideration is determined by the fact that in 2022-2023, the number of injured civilians in Ukraine increased by 15%, the military - by five times, and the organization of the activities of prosthetic and orthopedic enterprises does not allow to fully satisfy the needs in prosthetics. The research methodology was based on the use of such methods as: content analysis (to identify the main content of legal acts on providing persons with disabilities with technical and other means of rehabilitation), abstraction - in order to highlight the most essential characteristics of the development of the prosthetics and orthopedics industry, systematization, which made it possible to organize and bring to a certain degree of coherence the state policy measures necessary to ensure the development of the field of prosthetics. The tasks of the state in the context of the implementation of social policy are measures aimed at the development of the prosthetic and orthopedic industry and the establishment of a system of rehabilitation of people affected by the war. In order to streamline the system of prosthetics for people with disabilities, improve the quality of prosthetics and rational use of budget funds, in 2014 the government liquidated "Ukrprotez" as an intermediary in the distribution of financial resources. The next stage of the reorganization of the network of prosthetic and orthopedic enterprises was the transformation of state-owned enterprises into state-owned commercial ones. The practical significance of the article lies in the substantiation of the set of measures necessary for the reorganization and development of enterprises in the prosthetics industry, including issues of a strategic nature that require the development of an appropriate Strategy. The industry development strategy, in turn, should include decisions on organizational, technological, personnel, and economic issues of ensuring the effective operation of prosthetic and orthopedic enterprises.

Financial and legal principles of social protection of military personnel

It has been proven that the legality and sufficiency of the state’s financial activities for the social protection of military personnel in modern conditions in Ukraine depends on financial and legal regulation in the field of social policy. It has been noted that financial and legal protection, as an activity of the state for financial provision of social protection of military personnel, is based on the budget law, expenditures, which require coordination of the budgetary powers of the legislator and the Government on the formation and distribution of financial resources at the planning stage, as well as development and approval of the main financial law.
 The dependence of the financial state of the social protection of servicemen on the state financing of the directions and types of social policy of the state in the sphere of defense which requires legal regulation of the sources of financing of social payments of servicemen has been argued, as well as the distribution of the amounts of allocated funds and clarification of the powers of the involved subjects, in particular the legislator, the Government and managers budget funds. It has been determined that in order to improve the financial and legal foundations of social protection of servicemen, it is advisable to ensure two conditions: firstly, the introduction of a budget classification code of types of special social payments to servicemen in the expenditures of the State Budget of Ukraine, and secondly, compliance with the targeting of benefits, guarantees, compensations and other social payments, which are defined by the current legislation for military personnel and their family members.
 It has been substantiated that the justice and legality of meeting the interests of military personnel, as well as of all citizens related to social protection, are based on financial and legal principles.

STRATEGIC ASPECTS OF FINANCIAL SUPPORT FOR SUSTAINABLE DEVELOPMENT GOALS: THE REGIONAL DIMENSION

The actualization and practical implementation of the concept of sustainable development in Ukraine began after 2015, when our country officially joined the global process of ensuring the Sustainable Development Goals. The purpose of the article is to study the place of local self-government in the financial support of the strategy for achieving the Sustainable Development Goals of Ukraine in the context of limited budgetary resources and decentralization. In the course of the analysis of the strategic role of local self-government in the financial support of the Sustainable Development Goals of Ukraine, it is found that municipal authorities, whose financial resources account for 35.0% of public finances, are responsible for achieving strategic objectives in the context of 7 Goals (41.2%). In order to assess the strategic potential of financial support for the Sustainable Development Goals at the regional level, the author proposes a methodological approach that takes into account the Pearson’s pairwise correlation coefficients. In this case, the values are taken that show a high density of stochastic relationship between the relevant indicator of formation and distribution of financial resources of local budgets and the indicator of the Sustainable Development Goals. There should also be an unidirectionality of Pearson’s coefficients with the intended purpose of the indicator. The progress in achieving the strategic objective (sub-objective) is based on the indicators with the highest correlation coefficients. It is substantiated that significant progress was made at the regional level in 2015-2021 with regard to Goal 17 «Partnership for Sustainable Development», since positive trends in the dynamics of 55% of the indicators of strategic objectives («sub-goals») were recorded. The author’s further research will focus on assessing progress towards achieving the Sustainable Development Goals in Ukraine, the financial support of which is the responsibility of local self-government bodies, especially in the context of martial law.

Centre-Province Relations in Pakistan: A Case Study of Khyber Pakhtunkhwa (2008-2013)

Pakistan is a multi-ethnic state, and as such, there has been a federal structure since its creation in 1947 to address ethnic issues effectively. The center-province relations have, however, suffered many ups and downs on certain issues, such as provincial autonomy and distribution of financial resources. The study in hand aims to investigate the relations between the Provincial Government of Khyber Pakhtunkhwa and the Federal Government of Pakistan at the center from 2008 to 2013. The focus here is on the PPPP-led government at the center and the ANP-led government in the Khyber Pakhtunkhwa province of Pakistan. The study proves that there was a significant improvement in the center-province relations in the case of the province of Khyber Pakhtunkhwa during the period under study. The introduction of the 18th Amendment to the constitution of Pakistan settled the longstanding issues of provincial autonomy and replaced the colonial name of the Province of North-West Frontier Province with Khyber Pakhtunkhwa. In the financial sphere, the 7th National Finance Commission (NFC) Award was a major achievement that enhanced the provincial share in financial resources. However, differences in the net-hydel profit could not be settled.

A Discussion on the Role of Financial Institutions in Fighting Climate Change

The climate change crisis is now a serious issue for the future of human life. This paper analyses the global food and energy crises from a green finance perspective. First, the author provides relevant research and evidence as a preliminary step and, based on relevant facts and reports, proposes adjustments to financial institutions and the distribution of financial resources, respectively, to achieve effective outcomes for future climate change crises.

Quantifying Housekeeping Challenge and Conservation Need

This simple model, developed by conservators, assists in the challenge of making preventive conservation, housekeeping, and care of historic interiors and collections, physically and economically sustainable, in historic houses welcoming increasing volumes of visitors (a primary source of dust). It introduces objectivity into conservation advice and management decisions: how many collections care staff should each historic house ideally employ, and how large an annual budget is required to fund the non-wage costs of routine preventive and interventive conservation? Are staffing structures rational and consistent, and tailored to the individual and developing circumstances of multiple properties? Eight qualitative and quantitative criteria are each given a score from 1–4 in relation to their data ranges. The total scores for each property are converted to percentages, correlated with staffing structures, and used to estimate the requirements for daily, weekly and annual housekeeping and conservation cleaning. Selected data are used to measure housekeeping performance against weekly targets, and to rationalize the distribution of financial resources for preventive conservation and maintenance. The model can be adapted for use in any museum or heritage building which needs to assess and quantify the routine care of interiors and collections on open display to visitors.

Entropy approach to the analysis of banks’ balance sheets

Accounting ensures the collection and systematization of documented information about the facts of the economic life of enterprises and organizations. The information collected is systematized and formalized in various forms of reporting. One of the key forms of reporting is the balance sheet. The balance sheet is based on the principle of double entry, according to which each change in the financial resources of the organization is reflected in at least two accounts related assets and liabilities. Thus, the condition of the balance of the volumes of the generalized values of assets and liabilities is realized. The control element of the balance sheet is the equality of the values of assets and liabilities. However, this control element does not allow us to identify the systemic difference (diversity) of balance sheets with equality of distributed funds. Namely, the equality condition is integral in nature and its fulfillment is not related to the specific nature of item-by-item distributions, since, at a given size of the total cost of the balance sheet, the condition can be fulfilled by various options for the distribution of financial resources by assets and liabilities. Therefore, within the framework of this article, an attempt has been made to introduce a new control element of the balance sheet, taking into account the uneven distribution of financial resources by assets and liabilities of credit and financial organizations.

Analysis of the impact of financial market in economy

The financial market is a form of market where financial resources appear as commodities. In other words, the financial market is a market that ensures the distribution of funds among economic subjects. Its main purpose is to ensure the efficient mobilization of funds and their transfer to those who need financial resources. One of the main factors of the need for the creation of the financial market is the unequal distribution of financial resources. Despite the fact that a lot of work has been done on the development of the financial market in our republic, its current situation still does not fully meet world standards, and many problems are evident in this area. Thus, the financial market in our country belongs to the emerging market type and there is a need to take more measures and improve the system.

The effect of financial development on economic growth in high-income countries

This study aims to analyze the effect of financial development on economic growth high-income countries. To support the results of this study, the variables used are financial development from the institutional and market side, as well savings and investment. Through the panel data method using the fixed effects model (FEM) approach. The results of study show that financial development has an effect on economic growth high-income countries. This research emphasizes that financial development can encourage economic growth for countries that focus on building a strong financial sector by mobilizing capital, which is a necessity for economic activity. Especially from the perspective of financial institutions and markets, financial development must become the basis for formulating policies so that it will have an impact on the absorption and distribution of financial resources and become an important factor in driving economic growth. In addition, savings and investment are channels to meet the needs of financial resources and must be maintained so that they can contribute to economic growth. With these results, the governments of high-income countries can strengthen policy in the financial sector so that it becomes the foundation for economic growth.