Nexus Financial Innovation and Economics Growth in Thailand

Abstract

It is notable that technological changes are essential for financial innovation when reflecting on economic growth. Directions of the relationships at the nexus of financial innovation and economic growth are still hazy, especially in developing countries. This study therefore focusses on analyzing the relationship between financial innovation and economic growth in Thailand, based on quarterly data from 2010 – 2020, using the Autoregressive Distributed Lag (ARDL) and Granger causality test. The cointegration result was in the same direction and financial innovation was found to be the cause of change in economic growth in Thailand. Hence, by increasing the efficiency of financial intermediaries, financial innovation is the driving force for long-term growth in the Thai economy. Accordingly, policymakers should encourage the development of financial innovation as well as promote access to financial services for sustainable growth of the Thai economy.