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This innovative study examines the effect of financial inclusion measured by financial inclusion index (FII) on the economic growth of the Islamic Development Bank (IsDB) member countries. The data were collected on different elements of financial inclusion and economic growth for the period 2000-2016.To draw multi-dimensional results, we have set up the panel data for 45 countries, and we estimated the generalized method of moments (GMM), two-stage least squares (2SLS), panel vector autoregressive (VAR) and panel Granger causality tests. Based on the results of dynamic panel estimations, we find that FII has a positive effect on economic growth. The findings of Granger causality analysis reveals a bi-directional causality of FII indicators with economic growth and a unidirectional causality between the FII and economic growth.Therefore, it suggests that the financial inclusion index has a positive effect on the economic growth in IsDB member countries. These findings recommend that the policymakers should consider financial inclusion as a driver of the economic growth in the long run. The empirical findings have useful policy insights for the IsDB member countries.

It is no doubt that successful organizations tend to be those that persistently innovate, believing on new technologies and emphasizing on abilities and knowledge of their employees. Knowledge has become one of the most imperative intangible assets of financial institutions in recent years. The aspiring organizations have recognized that Intellectual Capital Efficiency is important in promoting the performance of financial institutions. This paper tests the relationship between intellectual capital and performance using a sample of 76 financial institutions from Mainland China, Hong Kong, and Taiwan over the period 2006–2016. The results show that intellectual capital efficiency has a significant and positive impact on the profitability of financial institutions, while human capital and structural capital are not significantly related to the performance of financial institutions in Taiwan and Hong Kong. The present research extends the knowledge of intellectual capital between managers, academicians, and highlights its contribution to the value creation. These results determine that the financial institutions need to emphasize on the elements of intellectual capital, to enhance the best financial performances in these countries.

Separation of ownership and control plays a significant role in determining the agency cost, and there are many consequences of this agency problem. The control-enhancing mechanisms enhance control of controlling shareholders who expropriate small shareholders. Controlling shareholders are different in different countries; majorly, family firms are controlling firms in Pakistani context. The use of control-enhancing mechanism is rampant in emerging economies, and even some developed countries, related research especially in Pakistan requires evidence. This study exhibits a pooled cross-sectional analysis of listed companies in Pakistan between 2005 and 2016. In this research, we have examined the influence of control-enhancing mechanisms on firms’ earnings management and which mechanism (pyramid control, multiple control chains, and cross-holding control) is significantly influencing the earnings management of firms. We have analyzed both types of earnings manipulation techniques (accrual and real earning management). Our results explicate that the pyramid control and multiple control chain mechanisms are significantly positively related to the accruals earning management and real earnings management, unveiling that firms with these controls manipulate earnings with discretionary accruals as well as with real activity manipulation. Real activity manipulation enhances firms to overproduce the inventory (decreasing the unit price) and to reduce the discretionary expenses (increasing the reported earnings).

This study investigates the causal relationship between financial innovation and economic growth in China, India, and Pakistan over the period of 1970-2016. Using an Autoregressive Distributed Lag (ARDL) bound testing and Granger causality-based Error Correction Model (ECM), this study finds that financial innovation generally has a positive and statistically significant impact on economic growth in the short-run and long-run. These results show that in the long-run, monetary management and credit flow to the private sector play an essential role in economic growth. The trade openness and gross capital formation contribute considerably to the economic growth in China, India, and Pakistan. For robustness, this study also applies the Dynamic Ordinary Least Square (DOLS) and Fully Modified Ordinary Least Square (FMOLS) method. The findings of this study suggest that the financial sector plays an essential role in supporting innovation activity in Asian countries.

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This study analyzes the effect of control enhancing mechanisms (CEMs) on a firm's innovation activities. In the light of conflicting theoretical prophecies on the role of ultimate control, we analyze the ownership concentration by examining the cash flow and control rights deviation which embolden ultimate owners to expropriate. Empirical evidence suggests that CEMs have a negative effect on core and base innovation, although the effect is severe in intermediate aged firms and largest sized firms. These findings are robust in different specifications and have significant implications for policymakers.

This study investigates the causal relationship between banking sector development, inflation, and economic growth for six Asian countries (Bangladesh, China, India, Malaysia, Pakistan and Sri Lanka) over the period of 1970-2016. Using a Pedroni panel, Kao co-integration test, Panel Granger causality-based Error Correction Model, Dynamic ordinary least square (DOLS), and Fully modified ordinary least square (FMOLS), this study finds that the development of the banking sector generally has a positive relationship with economic growth in the long-run. This results show that in the long-run, monetary policy play a vital role in the economic growth. This study also confirmed the response causality between the indicators of banking sector development and economic growth. Based on the empirical findings, this research provides important policy implications to the banking sector and economic supervisory bodies in order to achieve the long run economic growth.