ECONOMIC DYNAMICS IN THE DIGITAL AGE: A PANEL ANALYSIS OF FINTECH AND ECONOMIC GROWTH ON G20 COUNTRIES

Abstract

In an era marked by the transformative impact of financial technology (FinTech) in the world, this study aims to analyze the implications of FinTech on economic growth within specific G20 nations such as Brazil, China, Germany, France, India, and Indonesia. Employing a robust framework encompassing panel unit root test and the Autoregressive Distributed Lag (ARDL) approach within a Panel Mean Group (PMG) framework, the analysis spans the years 2005 to 2020. The long-run PMG estimates reveal the significant impact of FinTech adoption on economic growth. Additionally, the study identifies substantial impacts of financial efficiency, development, R&D expenditure, energy consumption, population size, and capital accumulation on economic growth. Furthermore, our findings indicate that all economies demonstrate a prompt adjustment toward long-term equilibrium following a shock, displaying varied adjustment speeds dependent on their maturity and resilience. This research extends the existing literature by providing context-specific insights into the impact of financial and non-financial factors on economic growth in diverse G20 economies. The findings of the study suggest that governments should encourage and support the adoption of FinTech to leverage its positive impact on economic growth. Policies that facilitate FinTech innovation, collaboration, and investment can contribute to enhanced financial efficiency and development.