The Effects of FinTech and Financial Development on Economic Growth

Abstract

From mobile payment solutions in emerging economies to online banking services in developed countries, technology is revolutionizing the way people access and manage their finances globally. This research aims to investigate the impact of financial technology and financial development on economic growth in countries with different levels of economic and financial development. Specifically, it seeks to explore whether financial development influences the relationship between economic growth and FinTech in a positive way; and whether the separate effects of FinTech and financial development on future economic growth are positive. The research question is addressed through a cross-country analysis using a panel data regression model, which incorporates fixed-effects variables for both year and country, covering a span of nine years and including data from 102 countries. The results prove that financial development does have a positive impact on GDP per capita growth, but FinTech does not. However, it is inferred that FinTech has a greater positive impact on economic growth in countries with higher levels of financial development.