The nonlinear effects of entrepreneurship and institutional factors on financial development

The effect of financial development on the economy is so important that today it is believed that economic development cannot be achieved without an efficient and developed financial sector. In this research, to investigate the nonlinear intersectional effects of entrepreneurship and institutional factors on financial development (banking credit and value of trading shares) in 14 countries with high HDI during the time period of 2007-2020 using the panel data econometric technique It is addressed by nonlinear Nonlinear Auto Regressive Distributed Lag (NARDL) approach. The results of the estimations indicate that in the studied countries, the positive (negative) shocks of the intersectional effects of entrepreneurship and institutional factors have a positive (negative) effect on banking credit and value of trading shares. According to the results, first by improving and then by expanding the institutional and entrepreneurship indicators, it is possible to play a significant role in increasing the financial development indicators.