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Digital transformation, financial openness and economic growth

Author

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  • Berrayhane, Hana
  • El Ferktaji, Riadh

Abstract

This study examines the combined impact of financial openness and digital transformation on economic growth, distinguishing between developed and emerging countries. Although these two factors have been widely studied separately, their interaction has not been explicitly addressed in existing literature. This study aims to fill this research gap by analyzing their joint effects on economic growth. Our study covers a sample of 37 countries, including 17 emerging and 20 developed economies, over the period 2010–2023. The main finding of this study highlights that the interaction between financial openness and digital transformation produces differentiated effects depending on the level of development. For emerging economies, the negative and statistically significant effect suggests that, without strong institutions or mature digital infrastructures, this interaction may exacerbate economic vulnerabilities. For developed countries, the absence of significance indicates that, despite a slight negative tendency, their robust systems help absorb the potential adverse effects of this interaction.

Suggested Citation

  • Berrayhane, Hana & El Ferktaji, Riadh, 2026. "Digital transformation, financial openness and economic growth," MPRA Paper 127658, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:127658
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    Keywords

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    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • 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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