Abstract:
The aim of this study is to uncover the impact of fintech and market capitalization on economic growth of developing countries. The secondary data is collected from World Bank from 2010 to 2023 timeframe. Bangladesh, Colombia, Egypt, Ghana, Kenya, Morocco, Pakistan, Peru, Philippines, and Vietnam are randomly-selected based on their level of fintech and financial development. Fixed Effect Model is employed in E-views 10 program, for the panel data, comprised of 140 unbalanced observations. GDP per capita is utilized as the dependent variable which represents economic growth. Additionally, internet usage as a percentage of population serves as a proxy for measuring fintech. Market capitalization, Gross Capital Formation, FDI, labor and trade are the following regressors evaluated in this research. Empirical findings suggest that fintech, market capitalization and labor are statistically significant and have a positive correlation with economic growth. Trade openness appears to be statistical-wise but negatively correlated to the dependent variable, due to structural vulnerabilities, weak industrial capacity, deteriorating terms of trade, rising inequality, and the absence of strong institutions. Conversely, the study reveals that GCF and FDI have no impact on economic growth of emerging nations because of political and financial volatility. The results give FinTech companies a better knowledge of how their activities can affect GDP per capita, which is particularly valuable for those looking to expand in emerging nations. A thorough foundation for future academic research and strategic decision-making in the context of digital economic change is also provided by the study.
