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The Nature of Financial Innovation: A Post-Schumpeterian Analysis


  • Çinla Akdere
  • Pelin Benli


Is it possible to apply a Schumpeterian notion of entrepreneurial innovation to the financial sphere? Joseph A. Schumpeter, arguing that innovation could only be proposed by entrepreneurs and take place predominantly in the real sector, seems to propose a foundation for a contemporaray analysis of financial innovations. There is a lack of specific emphasis on the evolution of financial innovations in Schumpeter’s work. The purpose of the paper is to demonstrate that Schumpeter’s analysis of entrepreneurial innovation, which takes place in the real economy, also proposes a theoretical account for understanding the dynamics of financial innovations. Our aim is to propose a comparative study between entrepreneurial innovations and financial innovations. Nevertheless, analyzing financial innovations in the framework of Schumpeter’s economic theory doesn’t mean to legitimize them all. This is also an investigation for diversifying financial innovations according to their impact on the real economy. We provide a basic foundation for a post-Schumpeterian description of the evolution of the capitalist system.

Suggested Citation

  • Çinla Akdere & Pelin Benli, 2018. "The Nature of Financial Innovation: A Post-Schumpeterian Analysis," Journal of Economic Issues, Taylor & Francis Journals, vol. 52(3), pages 717-748, July.
  • Handle: RePEc:mes:jeciss:v:52:y:2018:i:3:p:717-748
    DOI: 10.1080/00213624.2018.1498717

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    Cited by:

    1. Pavel Baboshkin & Alexey Mikhaylov & Zaffar Ahmed Shaikh, 2022. "Sustainable Cryptocurrency Growth Impossible? Impact of Network Power Demand on Bitcoin Price," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 3, pages 116-130, June.
    2. Xifeng Wu & Yue Shen & Jin Chen & Yu Chen, 2023. "Social–financial approach for analyzing financial transitions," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-23, December.
    3. Nikita Moiseev & Alexey Mikhaylov & Hasan Dinçer & Serhat Yüksel, 2023. "Market capitalization shock effects on open innovation models in e-commerce: golden cut q-rung orthopair fuzzy multicriteria decision-making analysis," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-25, December.

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