Exploring the synergistic effects of financial revolution and human resources on India's economic transformation

Priyanka Bose () and Bamadev Mahapatra ()
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Priyanka Bose: Kalinga Institute of Industrial Technology Deemed University
Bamadev Mahapatra: Institute of Management and Information Technology (IMIT) Cuttack

SN Business & Economics, 2025, vol. 5, issue 9, 1-36

Abstract: Abstract India's strong commitment to fostering innovation opens new avenues to understanding the transformative impact of financial sector modernization on economic growth. This study explores the intricate relationships between financial innovation, human capital development, and economic expansion in India. The study uses an Autoregressive Distributed Lag (ARDL) technique over the period 1990–2020. The analysis reveals a mixed order of integration among the variables, as confirmed by Unit Root tests. The findings indicate that financial innovation, human capital, and trade openness play crucial roles in driving India's economic growth in both the short and long run, with gross capital formation emerging as a key contributor. Furthermore, Granger-causality tests highlight a bidirectional relationship, demonstrating mutual reinforcement between financial innovation, human capital development, and economic growth. To leverage these dynamics, the study recommends establishing a supportive policy framework that encourages financial innovation and strengthens human capital investments, emphasizing that strategic investments in these areas are vital for sustaining long-term economic progress.

Keywords: Economic expansion; Financial revolution; Human resources; Trade openness; Capital formation; Autoregressive distributed lag (search for similar items in EconPapers)
JEL-codes: E24 F43 G2 N2 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s43546-025-00878-9

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