Impact of information and communication technology on financial development: An International view

Any economy’s growth depends on finance sector expansion. Information and Communication technology (ICT) is crucial to a successful financial system in the digital age. In recent years, numerous researchers have empirically examined the relationship between ICT and financial development; however, these studies are confined to certain economies or areas and overlook the multi-layered dimensions of both ICT and FD. An in-depth analysis of ICT’s effect on Financial Development (FD) is done in the present study by utilizing the new additional indicators, considering the depth and efficiency dimensions on the panel data set of 114 economies for 2000–2021 worldwide. Specifically, the most advanced panel data methods, named cross-sectionally autoregressive distributive lag (CS-ÅRDL) and Dumitrescu-Ηurlin panel causality techniques to empirically elaborate on how ICT infrastructure measured by internet users, mobile cellular users, fixed telephone, and broadband subscriptions influence the FD globally. Based on the results of the adopted methodology, there are significant and long-run relationships among the ICT, gross fixed capital formation (GFCF), unemployment (UT), and financial development (FD). To exhibit the CS-ARDL’s resilience concerning the study factors, robustness analysis was also carried out using panel correlated standard errors (PCSE) and feasible generalized least squares (FGLS). Taking into account the empirical findings of the ICT-FD-based study; finally, we proposed several sensible policy implications, their main implementation difficulties, possible cures, and some feasible suggestions for subsequent studies.