Impact of cashless bank payments on economic growth: Evidence from G7 countries

Muhammad Noman, Alina Maydybura, Khalil Ahmed Channa, Wing-Keung Wong and Bisharat Chang
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Muhammad Noman: Department of Management Sciences, Shaheed Zulfiqar Ali Bhutto Institute of Science and Technology, Larkana, Pakistan
Alina Maydybura: Department of Business and Management, RIT Dubai, Dubai, UAE
Khalil Ahmed Channa: Department of Business Administration, Sukkur IBA University, Sukkur, Sindh, Pakistan

Advances in Decision Sciences, 2023, vol. 27, issue 1, 1-22

Abstract: [Purpose] This paper examines the impact of cashless bank payments on the economic growth of G7 countries, namely Canada, Germany, Japan, France, Italy, the United Kingdom and the United States. [Design/methodology/approach] The paper employed annual data from 2012 to 2020 and the latest Panel ARDL model to examine the relationship described above. [Findings] The study's findings suggest that in the long run the cashless mode of payments considered in this study, which includes card & e-money, credit transfer and cheque, have a strong positive relationship with the real GDP of G7 countries. In the short run, card & e-money and cheque payments positively and significantly affect the real GDP. Credit transfer is found to have an insignificant relationship in the short run. [Originality/value] As the world is moving towards digitization and a cashless economy, the impact of cashless payments and digital finance is becoming an important topic for researchers. Further, existing literature focused only on European Countries that used traditional methodologies and provided mixed results. Therefore, this study aims to extend the existing literature in context of G7 countries by employing latest Panel ARDL model. [Practical implications] This study is beneficial for policymakers, in particular, of G7 countries, as it indicates the role of digitization and cashless payments in the growth and development of the economy.

Keywords: Cashless bank payments; economic growth; G7 countries; Panel ARDL; cashless society; digital finance; financial inclusion (search for similar items in EconPapers)
JEL-codes: C12 E42 G20 O38 O39 O47 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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