Feasibility of the Fintech Industry as an Innovation Platform for Sustainable Economic Growth in Korea

Yong Jae Shin and Yongrok Choi
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Yong Jae Shin: Department of Management Information Systems, Sahmyook University, 815, Hwarang-ro, Nowon-gu, Seoul 01795, Korea
Yongrok Choi: Department of International Trade, Inha University, 100 Inha-ro, Michuhol-gu, Incheon 22212, Korea

Sustainability, 2019, vol. 11, issue 19, 1-21

Abstract: This paper examines the feasibility of fintech as a platform for sustainable economic growth and as a prompter of the fourth industrial revolution. To analyze the role of fintech in the national economy, we first broaden its definition and compare its economic performance using three methodologies—Demand-driven model, Supply-driven model and industry linkage effect in interindustry analysis. We find that the fintech industry has a stronger effect on production inducement. Regarding industry linkage effects, fintech ranked the top in all 31 industries for the forward linkage effect and 22 for the background linkage effect—much higher than the traditional financial industry. This implies that the fintech industry is effective as the intermediate good with national demand as well as the final good. Particularly, this industry plays the roles of intermediate and final goods across almost all industries. That is, fintech could better promote overall national economic performance as a platform industry. Because most businesses within the fintech industry depend on innovation through the integration of finance and information technology, we find that fintech can feasibly prompt the fourth industrial revolution. Nonetheless, this industry is characterized by excessive regulations in Korea, indicating the need for negative regulation for new, innovative businesses within the fintech industry that would critically emphasize innovativeness for inclusive, sustainable economic growth.

Keywords: fintech; sustainable growth; innovation; input–output analysis; exogenous specification (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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