The impact of fintech investment on economic growth

Abstract

This study investigates the effect of fintech equity funding on economic growth using annual panel data for 25 countries over the period 2010–2021. Motivated by the evolving finance–growth nexus and the rapid expansion of digital financial services, the analysis employs a range of econometric approaches—including OLS, Fixed Effects, Random Effects, and System GMM—to account for unobserved heterogeneity, dynamic persistence, and potential endogeneity. Across all specifications, fintech investment is positively and significantly associated with economic growth. Robustness analyses using GDP per capita growth and heterogeneity tests across growth regimes confirm the stability of the results and reveal that the growth-enhancing effect of fintech is strongest in moderately high-growth economies. These findings highlight the role of fintech as a catalyst for economic performance and underscore the need for policy frameworks that support digital innovation, strengthen absorptive capacity, and ensure broad-based participation in emerging financial ecosystems.