The Impact of Financial Innovation on Economic Growth in Vietnam: Panel Data Analysis

This study examines the impact of financial innovation on economic growth in Vietnam, using panel data analysis during 2010 to 2020 in both the whole country level and regional level. Financial innovation measurements include financial institutions innovation and financial markets innovation which are constructed based on two core sectors of the financial system. For the whole country level, the results from the difference-GMM method indicate that financial institutions innovation positively impacts economic growth in Vietnam. Meanwhile, the negative influence of financial markets innovation on economic growth is pointed out in the study. For six regions of Vietnam, the similar results as the country in five regions are documented except the Central Highlands region which shows that financial institutions innovation non-significantly influences its regional growth. Findings from this research elicit significant policies that recognize financial innovation as a crucial driver to boost economic growth in Vietnam and foster economic regions.