The role of financial institutions in promoting economic growth: A comparative study of developed and developing economies
Abstract
The study examines the role of financial institutions in promoting economic growth in both developed and developing economies.
In developed economies, these institutions, with their advanced infrastructure and regulatory frameworks, efficiently allocate resources, man_x005fage risks, and support business expansion, thereby fostering economic growth. In contrast, financial institutions in developing economies face
challenges like limited capital access and inadequate regulation. Despite this, they are crucial in providing financial services to underserved
sectors, supporting small businesses, and promoting financial inclusion. The comparative analysis highlights that while their core functions
are similar across economies, the methods and impacts differ significantly, with developed economies focusing on innovation and complex
financial products and developing economies emphasizing accessibility and basic services.
In developed economies, these institutions, with their advanced infrastructure and regulatory frameworks, efficiently allocate resources, man_x005fage risks, and support business expansion, thereby fostering economic growth. In contrast, financial institutions in developing economies face
challenges like limited capital access and inadequate regulation. Despite this, they are crucial in providing financial services to underserved
sectors, supporting small businesses, and promoting financial inclusion. The comparative analysis highlights that while their core functions
are similar across economies, the methods and impacts differ significantly, with developed economies focusing on innovation and complex
financial products and developing economies emphasizing accessibility and basic services.
Keywords
Finance; Developing Economy; Advanced Economies
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PDFReferences
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DOI: http://dx.doi.org/10.18686/fm.v9i1.12053
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