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Feasibility of the Fintech Industry as an Innovation Platform for Sustainable Economic Growth in Korea

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  • Yong Jae Shin

    (Department of Management Information Systems, Sahmyook University, 815, Hwarang-ro, Nowon-gu, Seoul 01795, Korea)

  • Yongrok Choi

    (Department of International Trade, Inha University, 100 Inha-ro, Michuhol-gu, Incheon 22212, Korea)

Abstract

This paper examines the feasibility of fintech as a platform for sustainable economic growth and as a prompter of the fourth industrial revolution. To analyze the role of fintech in the national economy, we first broaden its definition and compare its economic performance using three methodologies—Demand-driven model, Supply-driven model and industry linkage effect in interindustry analysis. We find that the fintech industry has a stronger effect on production inducement. Regarding industry linkage effects, fintech ranked the top in all 31 industries for the forward linkage effect and 22 for the background linkage effect—much higher than the traditional financial industry. This implies that the fintech industry is effective as the intermediate good with national demand as well as the final good. Particularly, this industry plays the roles of intermediate and final goods across almost all industries. That is, fintech could better promote overall national economic performance as a platform industry. Because most businesses within the fintech industry depend on innovation through the integration of finance and information technology, we find that fintech can feasibly prompt the fourth industrial revolution. Nonetheless, this industry is characterized by excessive regulations in Korea, indicating the need for negative regulation for new, innovative businesses within the fintech industry that would critically emphasize innovativeness for inclusive, sustainable economic growth.

Suggested Citation

  • Yong Jae Shin & Yongrok Choi, 2019. "Feasibility of the Fintech Industry as an Innovation Platform for Sustainable Economic Growth in Korea," Sustainability, MDPI, vol. 11(19), pages 1-21, September.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:19:p:5351-:d:271474
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    2. Yingying Zhang-Zhang & Sylvia Rohlfer & Jay Rajasekera, 2020. "An Eco-Systematic View of Cross-Sector Fintech: The Case of Alibaba and Tencent," Sustainability, MDPI, vol. 12(21), pages 1-25, October.
    3. Sung-Wook Choi & Yong Jae Shin, 2023. "Role of Smart Farm as a Tool for Sustainable Economic Growth of Korean Agriculture: Using Input–Output Analysis," Sustainability, MDPI, vol. 15(4), pages 1-21, February.
    4. Luz del Carmen Díaz-Peña, 2021. "FinTech's business model in Mexico, a preliminary analysis," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(TNEA), pages 1-16, Septiembr.
    5. Thomas Puschmann & Christian Hugo Hoffmann & Valentyn Khmarskyi, 2020. "How Green FinTech Can Alleviate the Impact of Climate Change—The Case of Switzerland," Sustainability, MDPI, vol. 12(24), pages 1-30, December.
    6. E.V. Popov & Zh. Omonov & D.B. Schulgin, 2020. "Institutional Factors in the Development of Financial Technologies in Russia," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 19(4), pages 585-604.
    7. Qianhua Liu & Ka-Ching Chan & Ranga Chimhundu, 2024. "Fintech research: systematic mapping, classification, and future directions," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 10(1), pages 1-33, December.
    8. Amalya L. Oliver & Rotem Rittblat, 2023. "Facilitating Innovation for Complex Societal Challenges: Creating Communities and Innovation Ecosystems for SDG Goal of Forming Partnerships," Sustainability, MDPI, vol. 15(12), pages 1-12, June.
    9. Ruzita Abdul-Rahim & Siti Aisah Bohari & Aini Aman & Zainudin Awang, 2022. "Benefit–Risk Perceptions of FinTech Adoption for Sustainability from Bank Consumers’ Perspective: The Moderating Role of Fear of COVID-19," Sustainability, MDPI, vol. 14(14), pages 1-24, July.
    10. Florian Diener & Miroslav Špaček, 2021. "Digital Transformation in Banking: A Managerial Perspective on Barriers to Change," Sustainability, MDPI, vol. 13(4), pages 1-27, February.
    11. Hyun-Sun Ryu & Kwang Sun Ko, 2020. "Sustainable Development of Fintech: Focused on Uncertainty and Perceived Quality Issues," Sustainability, MDPI, vol. 12(18), pages 1-18, September.
    12. Roberto Moro-Visconti & Salvador Cruz Rambaud & Joaquín López Pascual, 2020. "Sustainability in FinTechs: An Explanation through Business Model Scalability and Market Valuation," Sustainability, MDPI, vol. 12(24), pages 1-24, December.
    13. Luiz Antonio Joia & Joaquim Pedro Vasconcelos Cordeiro, 2021. "Unlocking the Potential of Fintechs for Financial Inclusion: A Delphi-Based Approach," Sustainability, MDPI, vol. 13(21), pages 1-19, October.
    14. Gulizhaer Aisaiti & Qi Dong & Ling Liang & Jiqing Xie & Jiaping Xie, 2022. "How the Target Positioning of the S&T Innovation Platform Impacts Its Network Innovation Capability in China," Sustainability, MDPI, vol. 15(1), pages 1-29, December.
    15. Bouchtaoui Mohamed, 2023. "Digital Transformation and Financial Inclusion: A Strategic Imperative for Morocco's Banking Sector [Transformation Digitale et Inclusion Financière :Une Impérative Stratégique pour le Secteur Banc," Post-Print hal-04218990, HAL.
    16. Zhikai Peng & Jinchuan Ke, 2022. "Spillover Effect of the Interaction between Fintech and the Real Economy Based on Tail Risk Dependent Structure Analysis," Sustainability, MDPI, vol. 14(13), pages 1-22, June.
    17. Do-Hyung Park, 2019. "Virtuality Changes Consumer Preference: The Effect of Transaction Virtuality as Psychological Distance on Consumer Purchase Behavior," Sustainability, MDPI, vol. 11(23), pages 1-16, November.
    18. Adriana Grigorescu & Oana Oprisan & Cristina Lincaru & Camelia Speranta Pirciog, 2023. "E-Banking Convergence and the Adopter’s Behavior Changing Across EU Countries," SAGE Open, , vol. 13(4), pages 21582440231, December.

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