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Role of digital finance, investment, and trade in technological progress

Author

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  • Xiao, Nanbing
  • Zhou, Jincheng
  • Fang, Xia

Abstract

The primary purpose of this study is to evaluate the impacts of digital finance, trade, and investment on technological progress in 30 developing Asian economies by employing the FMOLS (Fully Modified OLS) technique and annual data from 2000 to 2020. The findings concluded that digital finance has a positive impact on technology progress. Moreover, trade liberalization may accelerate technological progress. Foreign direct investment has no significant coefficient, interpreting that inward FDI (Foreign Direct Investment) to the examined developing Asian economies is unrelated to technological progress. The causality test confirmed a neutrality hypothesis for the causal relationship between FDI and technological progress. Furthermore, the bi-directional linkage between trade openness and technological progress is confirmed. The paper recommends that developing economies increase the share of investment in technological progress, prioritization of regionalism and trade multilateralism for technology transfer, and establishment of a “digital financial inclusion” framework.

Suggested Citation

  • Xiao, Nanbing & Zhou, Jincheng & Fang, Xia, 2023. "Role of digital finance, investment, and trade in technological progress," Global Finance Journal, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:glofin:v:57:y:2023:i:c:s1044028323000480
    DOI: 10.1016/j.gfj.2023.100853
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    Cited by:

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    3. Wu, Juan, 2023. "Nexus analysis of financial management, digital finance and new technologies," Global Finance Journal, Elsevier, vol. 57(C).
    4. Theodoros Daglis & Konstantinos N. Konstantakis & Panos Xidonas & Panayotis G. Michaelides & Areistidis Samitas, 2024. "Solar Weather Dynamics and the US Economy: A Comprehensive GVAR Perspective," Review of Quantitative Finance and Accounting, Springer, vol. 63(3), pages 955-977, October.

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    More about this item

    Keywords

    Digital finance; Technological progress; Trade openness; Investment; Panel data;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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