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The Role of FinTech and Institutional Quality in Enhancing Economic Readiness amid Climate Risks

Author

Listed:
  • Sudarwati

    (Department of Management, Department of Economics, Universitas Islam Batik, Surakarta, Indonesia)

  • Kartika Hendra Titisari

    (Department of Accounting, Department of Economics, Universitas Islam Batik, Surakarta, Indonesia)

Abstract

Purpose: We explore how institutions’s adaptability, FinTech and business age dynamics intersect in the emergence of economic readiness for climate adaption across a range of national contexts. Method: Based on panel data analysis of 80 countries over a span of ten years, this study utilizes fixed effects regression; moderation analysis using SPSS Macro; quantile regression; and robustness checks, including lagged variables and panel-corrected standard errors, to confirm the robustness of the results. Findings: FinTech has a significantly positive influence on economic preparedness, and this influence is moderated by institutional quality and firm development stage. Digital financial innovations have a deeper impact on countries with more dynamic institutions and structurally more developed business environments. Quantile regression shows that such an effect becomes more pronounced in relatively high-achieving economies, while regional analysis demonstrates that advanced economies make better use of FinTech than developing economies. Novelty: Laying out the contextual conditions under which FinTech can create economic resilience, this study serves to connect digital finance and sustainability. Contrary to earlier works which examine only the technological and economic aspects, this study included institutional and business structure factors in the nexus between FinTech and readiness to adopt it. Implications: The results show that there is no one-size-fits-all approach to FinTech by policymakers and diverse international development organisations. Instead, investments in institutional reforms and business development are critical in unleashing the full potential of FinTech in climate preparedness efforts.

Suggested Citation

  • Sudarwati & Kartika Hendra Titisari, 2025. "The Role of FinTech and Institutional Quality in Enhancing Economic Readiness amid Climate Risks," Journal Economic Business Innovation, PT. Inovasi Analisis Data, vol. 2(1), pages 14-29.
    • Handle: RePEc:ebi:journl:v:2:y:2025:i:1:p:14-29
    DOI: 10.69725/jebi.v2i1.217
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    References listed on IDEAS

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    2. Koranteng, Barbara & You, Kefei, 2024. "Fintech and financial stability: Evidence from spatial analysis for 25 countries," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 93(C).
    3. Jay B. Barney, 2018. "Why resource‐based theory's model of profit appropriation must incorporate a stakeholder perspective," Strategic Management Journal, Wiley Blackwell, vol. 39(13), pages 3305-3325, December.
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