Geopolitical Risk and Its Influence on Egyptian Non-Financial Firms’ Performance: The Moderating Role of FinTech

Bashar Abu Khalaf (), Munirah Sarhan AlQahtani, Maryam Saad Al-Naimi and Meya Mardini
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Bashar Abu Khalaf: Accounting & Finance Department, University of Doha for Science & Technology, Doha P.O. Box 24449, Qatar
Munirah Sarhan AlQahtani: Business School, Imam Mohammad Ibn Saud Islamic University, Riyadh 11564, Saudi Arabia
Maryam Saad Al-Naimi: Accounting & Finance Department, University of Doha for Science & Technology, Doha P.O. Box 24449, Qatar
Meya Mardini: Accounting & Finance Department, University of Doha for Science & Technology, Doha P.O. Box 24449, Qatar

FinTech, 2025, vol. 4, issue 3, 1-20

Abstract: This study investigates the impact of geopolitical risk, firm characteristics, and macroeconomic variables on the performance of non-financial firms listed on the Egyptian Stock Exchange. The study analyzes a panel dataset consisting of 182 Egyptian firms over the period 2014–2023. Using the panel Generalized Method of Moments (GMM) regression technique, the study examines the effect of geopolitical risk on the return on assets. This study controls for firm characteristics such as liquidity, leverage, and growth opportunities and controls for macroeconomic variables such as inflation and GDP. This empirical evidence investigates the moderating role of FinTech on such relationship. The results reveal a significant and negative relationship between geopolitical risk and firms’ performance. Liquidity, growth opportunities, and inflation show positive and significant impacts. In contrast, leverage and GDP demonstrate significant negative relationships. Remarkably, FinTech moderates the relationship significantly and positively. Therefore, investors ought to proceed with prudence when positioning cash within elevated political volatility. The significant positive moderating effect of FinTech on this connection provides a vital strategic insight: enterprises with enhanced FinTech integration may demonstrate increased resilience to geopolitical shocks.

Keywords: geopolitical risk; firm performance; FinTech; growth; leverage; liquidity; panel GMM estimation (search for similar items in EconPapers)
JEL-codes: C6 F3 G O3 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jfinte:v:4:y:2025:i:3:p:30-:d:1704404

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