Patterns and Drivers of Financial Sector Growth in the Digital Age: Insights from a Study of Industrialized Economies

Khuong Vu () and Simplice Asongu
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Khuong Vu: National University of Singapore, Singapore

No 23/049, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

Abstract: The financial sector in advanced economies has undergone significant evolution driven by restructuring, globalization, and the digital revolution, which have profoundly shaped its developmental dynamics. This study investigates the forces behind the growth and convergence of the financial sector across 13 advanced economies from 2000 to 2015, focusing on the effects of digital transformation. The investigation unveils several noteworthy findings concerning the financial sector. First, most nations experienced substantial growth in value-added, coupled with a significant decrease in employment and robust advancements in labor productivity. Next, the primary drivers of labor productivity growth and convergence across many economies were driven by total factor productivity, labor quality, and digital transformation. Lastly, digital transformation not only directly contributed to the augmentation of labor productivity, as quantified through growth accounting estimation, but also wielded a considerable impact on the expansion of total factor productivity and the streamlining of the workforce.

Keywords: financial sector; productivity; digital transformation; innovation; catchup; industrialized economies (search for similar items in EconPapers)
JEL-codes: O16 O30 O40 O57 (search for similar items in EconPapers)
Pages: 43
Date: 2023-01
New Economics Papers: this item is included in nep-eff, nep-fdg, nep-pay and nep-sea
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Citations: View citations in EconPapers (2)

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http://www.afridev.org/RePEc/agd/agd-wpaper/Patter ... -the-Digital-Age.pdf Revised version, 2023 (application/pdf)

Related works:
Journal Article: Patterns and drivers of financial sector growth in the digital age: Insights from a study of industrialized economies (2023)
Working Paper: Patterns and Drivers of Financial Sector Growth in the Digital Age: Insights from a Study of Industrialized Economies (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:agd:wpaper:23/049

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