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

FRB of Atlanta Working Paper No. 2002-12

40 Pages Posted: 5 Dec 2002

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: July 2002

Abstract

This paper reviews the extant empirical studies of financial innovation. Adopting broad criteria, the authors found just two dozen studies, over half of which (fourteen) had been conducted since 2000. Since some financial innovations are examined by more than one study, only fourteen 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. The authors offer some tentative conjectures as to why empirical studies of financial innovation are comparatively rare. Among their suggested culprits is an absence of accessible data. The authors 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

JEL Classification: G00, O31

Suggested Citation

Frame, W. Scott and White, Lawrence J., Empirical Studies of Financial Innovation: Lots of Talk, Little Action? (July 2002). FRB of Atlanta Working Paper No. 2002-12. Available at SSRN: https://ssrn.com/abstract=325800 or http://dx.doi.org/10.2139/ssrn.325800

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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