Is Schumpeter right? Fintech and economic growth

Serhan Cevik

Economics of Innovation and New Technology, 2025, vol. 34, issue 7, 1095-1106

Abstract: The rise of fintech is revolutionizing the financial landscape, with products and companies advancing innovative technologies to improve and automate financial services. In this paper, I use a novel dataset to investigate the relationship between fintech and economic growth in a panel of 198 countries over the period 2012–2020. This approach – utilizing direct measures of fintech – provides interesting empirical insights. First, the impact magnitude and statistical significance of fintech on real GDP per capita growth depend on the type of instrument (digital lending vs. digital capital raising). While digital lending has a statistically significant positive effect on economic growth, digital capital raising has a large but insignificant effect. Second, the overall impact of fintech including all instruments is positive and statistically significant because of the overwhelming share of digital lending in total. Finally, while the positive relationship between fintech and growth is stronger in magnitude in advanced economies, the statistical significance of this effect is higher in developing countries. Taken as a whole, these results confirm Schumpeter’s prediction that financial innovation can promote growth, but not every type of fintech becomes an accelerator.

Date: 2025
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DOI: 10.1080/10438599.2024.2413478

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