Financial Innovation and Sustainable Development in Pakistan: An Empirical Study

Abstract

Pakistan is facing several challenges including economic, social, energy and environmental and is one of the most climate affected country. Henceforth, it is recommended to unearth the factors of sustainable development of Pakistan. This study explores the effect of financial innovation on sustainable development along with energy and trade openness as control variables. Results confirmed that long run relationship exists among the mentioned variables. Financial innovation is positively affecting sustainable development in long run as well as in short run. Likewise, energy is positively influencing sustainable development in both time spans whereas trade openness and energy only influence sustainable development in long run. Financial sector should keep on finding ways for innovation and utilizing fin-tech for ensuring and enhancing financial innovation. Government also must care and adopt policies that are encouraging financial innovation to ensure sustainable development in Pakistan.