Driving fintech evolution through integrating social entrepreneurship, sustainable innovation, Digital transformation, and regulatory frameworks

Usama  Shams; Noman  Shafi; Usman  Ullah; Waqas

Authors

Usama Shams MBA Student, Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad, Pakistan. Author
Noman Shafi Assistant Professor, Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad, Pakistan. Author
Usman Ullah M.Phil Research Scholar, Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad, Pakistan. Author
Waqas M.Phil Research Scholar, Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad, Pakistan. Author

Keywords:

Fintech, Green innovation, Environmental regulation, Social entrepreneurship, Infrastructure

Abstract

This study investigates the dynamic relationship between fintech and several critical factors, including green innovation, social entrepreneurship, environmental regulation, financial development, and physical infrastructure. Utilizing a comprehensive dataset spanning 33 countries over the period 2000-2022, the research employs the Generalized Method of Moments (GMM) to address potential endogeneity issues and ensure robust estimations. Digitalization is examined as a mediating variable, while research and development (R&D) acts as a moderating variable. The findings reveal significant positive impacts of green innovation, social entrepreneurship, and financial development on fintech advancement. Specifically, green innovation drives fintech growth by fostering sustainable technological advancements, while social entrepreneurship contributes by addressing social challenges through innovative financial solutions. While stringent regulations can stimulate fintech by encouraging green innovations and compliance with sustainability standards, overly restrictive regulations may hinder fintech growth by imposing excessive compliance costs. Physical infrastructure, however, shows no significant relationship with fintech development, suggesting that fintech can flourish regardless of the level of traditional physical infrastructure, possibly due to the digital nature of financial technologies. Moreover, the study highlights the critical mediating role of digitalization in enhancing fintech outcomes. Digitalization facilitates the adoption and integration of advanced technologies, making financial services more accessible, efficient, and user-friendly.

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