Advancing Sustainable Development Through Digital Transformation and Fintech Innovation

Sonia Sayari (), Nidhal Mgadmi, Imed Ben Dhaou, Mohammed Almehdar, Syed Khusro Chishty and Abbassi Rabeh
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Sonia Sayari: Department of Business and Administration, College of Administration and Finance, Saudi Electronic University, Jeddah 23442, Saudi Arabia
Nidhal Mgadmi: Department of Methods and Economics, Faculty of Economics and Management, University of Monastir, Mahdia 5111, Tunisia
Imed Ben Dhaou: Department of Computer Science, Hekma School of Engineering, Computing and Design, Dar Al-Hekma University, Jeddah 22246, Saudi Arabia
Mohammed Almehdar: Department of Finance, King Abdulaziz University, Jeddah 21589, Saudi Arabia
Syed Khusro Chishty: Department of Business and Administration, College of Administration and Finance, Saudi Electronic University, Jeddah 23442, Saudi Arabia
Abbassi Rabeh: Faculty of Economics Sciences and Management of Tunis, El Manar University, Tunis 1068, Tunisia

Sustainability, 2025, vol. 17, issue 11, 1-23

Abstract: Purpose: Our study investigates the combined effects of financial technologies (fintech) and the digital economy on sustainable development, considering geopolitical risks as a moderating factor. Origin: While sustainable development is a global imperative, the integrated roles of digital transformation and fintech remain insufficiently explored. Our research addresses this gap by analyzing their impacts on socioeconomic advancement and environmental sustainability across diverse contexts. Methodology: Employing panel data from 30 developed and developing countries between 1990 and 2023, we assess sustainable development using the Environmental Performance Index (EPI) and the Human Development Index (HDI). Independent variables include proxies for the digital economy (e.g., internet usage, mobile subscriptions, and high-tech exports) and fintech (e.g., digital payments, digital currency, and peer-to-peer lending). The Geopolitical Risk Index (GPRI) is used to evaluate the effect of political instability. We apply generalized least squares (GLS) and fixed-effects estimation (within) to ensure robustness. Findings: Our results indicate that digital transformation and fintech significantly foster socioeconomic development and environmental performance, even amidst geopolitical instability. Key variables such as digital payments and internet access show substantial positive impacts, providing valuable insights for policymakers aiming to enhance resilience and sustainability. Contributions: Our article offers a comprehensive evaluation of how the digital economy and fintech jointly influence sustainable development under geopolitical risks, providing a nuanced understanding for policymakers and researchers.

Keywords: digital economy; financial technologies (fintech); sustainable development; geopolitical risks; socioeconomic growth and environmental performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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