Empirical Studies of Financial Innovation: Lots of Talk, Little Action?

38 Pages Posted: 31 Oct 2008

See all articles by W. Scott Frame

W. Scott Frame

Federal Reserve Bank of Dallas

Lawrence J. White

New York University (NYU) - Leonard N. Stern School of Business, Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2002

Abstract

This paper reviews the extant empirical studies of financial innovation. Adopting broad criteria, we found just two-dozen studies (24), over half of which (14) had been conducted since 2000. Since some financial innovations are examined by more than one study, only 14 distinct phenomena have been covered. Especially striking is the fact that only two studies are directed at the hypotheses advanced in many broad descriptive articles concerning the environmental conditions (e.g., regulation, taxes, unstable macroeconomic conditions, and ripe technologies) spurring financial innovation. We offer some tentative conjectures as to why empirical studies of financial innovation are comparatively rare. Among our suggested culprits is an absence of accessible data. We urge financial regulators to undertake more surveys of financial innovation and to make the survey data more available to researchers.

Keywords: Financial innovation, banking, securities, patents

Suggested Citation

Frame, W. Scott and White, Lawrence J., Empirical Studies of Financial Innovation: Lots of Talk, Little Action? (2002). NYU Working Paper No. EC-02-18. Available at SSRN: https://ssrn.com/abstract=1292665

W. Scott Frame (Contact Author)

Federal Reserve Bank of Dallas ( email )

2200 N Pearl Street
Dallas, TX 75201
United States
214-922-6984 (Phone)

Lawrence J. White

New York University (NYU) - Leonard N. Stern School of Business, Department of Economics ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

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