The Influence of Financial Innovation and Market Capitalization on Economic Growth: A Comparative Review of Global and Emerging Markets
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Market Capitalization , Financial Innovation , Economic GrowthAbstract
The financial market is essential in fostering economic growth, with volatility and shocks playing a crucial role in the development of the economy. The growth of stock markets in emerging economies has led to significant research on the causes of the growth of the share market. Positive shocks in financial inclusion and well-developed financial markets, particularly stock markets, encourage foreign portfolio investment and improve the structure of the financial system. Financial innovation promotes financial activity in the economy through new forms and structures of financial institutions, enhanced financial services via technology advances, and enhanced financial goods, leading to economic growth. Equity financing is particularly beneficial for economic growth in both the US and Europe, with the effect being more significant in Europe. This study aims to explore the theoretical and literature-based connection between Market Capitalization and macroeconomic growth drivers.
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