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Impact of cashless bank payments on economic growth: Evidence from G7 countries

Author

Listed:
  • Muhammad Noman

    (Department of Management Sciences, Shaheed Zulfiqar Ali Bhutto Institute of Science and Technology, Larkana, Pakistan)

  • Alina Maydybura

    (Department of Business and Management, RIT Dubai, Dubai, UAE)

  • Khalil Ahmed Channa

    (Department of Business Administration, Sukkur IBA University, Sukkur, Sindh, Pakistan)

  • Wing-Keung Wong

    (Department of Finance, Fintech & Blockchain Research Center, and Big Data Research Center, Asia University)

  • Bisharat Hussain Chang

    (Department of Business Administration, Sukkur IBA University, Sukkur, Sindh, Pakistan)

Abstract

[Purpose] This paper examines the impact of cashless bank payments on the economic growth of G7 countries, namely Canada, Germany, Japan, France, Italy, the United Kingdom and the United States. [Design/methodology/approach] The paper employed annual data from 2012 to 2020 and the latest Panel ARDL model to examine the relationship described above. [Findings] The study's findings suggest that in the long run the cashless mode of payments considered in this study, which includes card & e-money, credit transfer and cheque, have a strong positive relationship with the real GDP of G7 countries. In the short run, card & e-money and cheque payments positively and significantly affect the real GDP. Credit transfer is found to have an insignificant relationship in the short run. [Originality/value] As the world is moving towards digitization and a cashless economy, the impact of cashless payments and digital finance is becoming an important topic for researchers. Further, existing literature focused only on European Countries that used traditional methodologies and provided mixed results. Therefore, this study aims to extend the existing literature in context of G7 countries by employing latest Panel ARDL model. [Practical implications] This study is beneficial for policymakers, in particular, of G7 countries, as it indicates the role of digitization and cashless payments in the growth and development of the economy.

Suggested Citation

  • Muhammad Noman & Alina Maydybura & Khalil Ahmed Channa & Wing-Keung Wong & Bisharat Hussain Chang, 2023. "Impact of cashless bank payments on economic growth: Evidence from G7 countries," Advances in Decision Sciences, Asia University, Taiwan, vol. 27(1), pages 1-22, March.
    • Handle: RePEc:aag:wpaper:v:27:y:2023:i:1:p:1-22
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    More about this item

    Keywords

    Cashless bank payments; economic growth; G7 countries; Panel ARDL; cashless society; digital finance; financial inclusion;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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