FinTech and economic readiness: Institutional navigation amid climate risks

Shajara Ul-Durar, Yassine Bakkar, Noman Arshed, Shabana Naveed and Beifan Zhang

Research in International Business and Finance, 2025, vol. 73, issue PA

Abstract: The current climate change is declared as a global boiling point by the UN; businesses are facing increasing costs in maintaining their supply chains and production standards and are being urged to adapt and innovate for environmental transition. With the Industrial Revolution 4.0, FinTech has helped develop households’ and firms’ resilience against climate change. This study explores how businesses use FinTech to increase economic readiness to attract adaptation investments. This study hypothesizes that, at initial levels of businesses, FinTech adoptions are typically targeted to improve profitability while, as businesses mature, their FinTech adoption shows a transition towards sustainability. Following this, the role of institutions in regulating an ecosystem is to promote sustainable financial innovations. This study employs a 114-country panel data analysis to investigate these dynamics empirically. The estimation using Panel Quantile Regression showed that institutional quality can moderate the U-shaped FinTech adoption and business readiness relationship to expedite the transition under Sustainable Development Goal 9. This research sheds light on the impact of institutional quality on improving businesses’ ability to attract adaptation investments via promoting sustainable innovation. Outcomes offer valuable insights for policymakers, firms, and investors seeking to foster a more resilient economy.

Keywords: Institutional Quality Moderator Model; Quadratic FinTech adoption function; Climate action; Financial inclusion; Technology 4.0 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:73:y:2025:i:pa:s0275531924003362

DOI: 10.1016/j.ribaf.2024.102543

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