Table 5 Bound Testing Results

Model – 1: \( \frac{M_2}{M_1} \) is the proxy as Financial Innovation

F-value

Cointegration

\( \Delta {lnGDPPC}_t=\left[{F_{lnGDPPC}}_t\left(\left({lnGDPPC}_t\right)|\mathit{\ln}\left(\frac{M_2}{M_1}\right),\mathit{\ln}\left({GEXP}_t\right),\mathit{\ln}\left({CPI}_t\right),\mathit{\ln}\left({TO}_t\right)\right)\right] \) (1a)

17.75

Present

\( \Delta \mathit{\ln}{\left(\frac{M_2}{M_1}\right)}_t=\left[{F_{\mathit{\ln}\left(\frac{M_2}{M_1}\right)}}_t\left(\left(\mathit{\ln}{\left(\frac{M_2}{M_1}\right)}_t\right)| lnGDPPC,\mathit{\ln}\left({GEXP}_t\right),\mathit{\ln}\left({CPI}_t\right),\mathit{\ln}\left({TO}_t\right)\right)\right] \) (1b)

1.89

Absent

\( \Delta {lnGEXP}_t=\left[{F_{lnGEXP C}}_t\left(\left({lnGEXP}_t\right)|\mathit{\ln}\left(\frac{M_2}{M_1}\right),\mathit{\ln}\left({GDPPC}_t\right),\mathit{\ln}\left({CPI}_t\right),\mathit{\ln}\left({TO}_t\right)\right)\right] \) (1c)

3.23

Absent

\( \Delta {lnCPI}_t=\left[{F_{lnCPI}}_t\left(\left({lnCPI}_t\right)|\mathit{\ln}\left(\frac{M_2}{M_1}\right),\mathit{\ln}\left({GDPPC}_t\right),\mathit{\ln}\left({GEXP}_t\right),\mathit{\ln}\left({TO}_t\right)\right)\right] \) (1d)

2.56

Absent

\( \Delta {lnTO}_t=\left[{F_{lnTO}}_t\left(\left({lnTO}_t\right)|\mathit{\ln}\left(\frac{M_2}{M_1}\right),\mathit{\ln}\left({GDPPC}_t\right),\mathit{\ln}\left({CPI}_t\right),\mathit{\ln}\left({GEXP}_t\right)\right)\right] \) (1e)

3.29

Absent

Model – 2: DCB is the proxy as Financial Innovation

∆lnGDPPC _t  = [F _lnGDPPCt ((lnGDPPC _t )| ln(DCB _t ), ln(GEXP _t ), ln(CPI _t ), ln(TO _t ))] (2a)

9.78

Present

\( \Delta \mathit{\ln}\Big({DCB_t}_t=\left[{F_{\mathit{\ln}\Big({DCB}_t}}_t\left(\left(\mathit{\ln}\Big({DCB_t}_t\right)| lnGDPPC,\mathit{\ln}\left({GEXP}_t\right),\mathit{\ln}\left({CPI}_t\right),\mathit{\ln}\left({TO}_t\right)\right)\right] \) (2b)

2.98

Absent

∆lnGEXP _t  = [F _lnGEXPCt ((lnGEXP _t )| ln(DCB _t ), ln(GDPPC _t ), ln(CPI _t ), ln(TO _t ))] (2c)

3.19

Absent

∆lnCPI _t  = [F _lnCPIt ((lnCPI _t )| ln(DCB _t ), ln(GDPPC _t ), ln(GEXP _t ), ln(TO _t ))] (2d)

3.49

Absent

∆lnTO _t  = [F _lnTOt ((lnTO _t )| ln(DCB _t ), ln(GDPPC _t ), ln(CPI _t ), ln(GEXP _t ))] (2e)

3.53

Absent

Model – 3: GCF is the proxy as Financial Development

∆lnGDPPC _t  = [F _lnGDPPCt ((lnGDPPC _t )| ln(GCF _t ), ln(GEXP _t ), ln(CPI _t ), ln(TO _t ))] (3a)

11.29

Present

∆lnGCF _t  = [F _lnGCFt ((lnGCF _t )| ln(GCF _t ), ln(GDPPC _t ), ln(CPI _t ), ln(TO _t ))] 3(b)

3.10

Absent

∆lnGEXP _t  = [F _lnGEXPCt ((lnGEXP _t )| ln(GCF _t ), ln(GDPPC _t ), ln(CPI _t ), ln(TO _t ))] (3c)

2.74

Absent

∆lnCPI _t  = [F _lnCPIt ((lnCPI _t )| ln(GCF _t ), ln(GDPPC _t ), ln(GEXP _t ), ln(TO _t ))] (3d)

2.89

Absent

∆lnTO _t  = [F _lnTOt ((lnTO _t )| ln(GCF _t ), ln(GDPPC _t ), ln(CPI _t ), ln(GEXP _t ))] (3e)

2.07

Absent

10%

5%

1%

Unrestricted intercept and no trend