Effects of digitalization on financialization: Empirical evidence from European countries

Le Thanh Ha

Technology in Society, 2022, vol. 68, issue C

Abstract: This study is the first to empirically examine the association of digital transformation and financial development. We measure digitalization in terms of digital connectivity, uses of the internet, e-business, e-commerce, and e-government. We also employ nine indicators to capture the depth, access, and efficiency of financial markets, institutions, and both. By using different econometric techniques to a sample of 27 European countries, we demonstrate the positive influences of digitalization on the developments of both financial markets and institutions. Among all dimensions of digitalization, digitalization in the business and public sector and individuals’ digital skills play a critical role in financial developments, while those in consumption may hinder financialization. With a prevalence of digital transformation, digitalization more likely enhances the depth and efficiency of financialization but shrinks the access to financialization. Our study also suggests the importance of digital transformation in the business and public sector in augmenting the depth and efficiency of financial markets, while digitalization in public sectors is an essential factor in driving access to financial markets. By measuring the short-run and long-run impacts of digitalization, we show that e-commerce and e-government have a long-term beneficial influence on financial markets and financial institutions, respectively.

Keywords: Digital transformation; Financialization; Short-term and long-term effects; European countries (search for similar items in EconPapers)
JEL-codes: C33 F21 G21 O16 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0160791X21003262
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:teinso:v:68:y:2022:i:c:s0160791x21003262

DOI: 10.1016/j.techsoc.2021.101851

Access Statistics for this article

Technology in Society is currently edited by Charla Griffy-Brown

More articles in Technology in Society from Elsevier
Bibliographic data for series maintained by Catherine Liu ().