The Impact of FinTech Adoption on Investment Efficiency Across the Stages of the Firm Life Cycle in the MENA Region

The aim of this study is, first, to investigate how the adoption of financial technology (FinTech) affects corporate investment efficiency in the MENA region, and second, to assess the impact of such investment efficiency by the stage of the firm life cycle.This study assembles the corresponding FinTech Adoption Index (FAI) over the period 2020 to 2024 based on a panel dataset of 332 non-financial firms listed on Dow Jones MENA Index.Firm life cycle (FLC) stages are classified based on cash flow patterns as defined by Dickinson (2011), and residual-based model of Biddle et al. ( 2009) is used to measure investment efficiency.The results from panel regression show that FinTech adoption significantly improves investment efficiency when the adoption affects primarily the investment efficiency of firms in the growth stage.The interaction effects reveal that the benefits of FinTech for efficiency are not evenly spread among firms' life cycle, with large efficiency increases occurring at early stages.Two-stage least squares estimates are robustness checked by 2SLS confirming the causal relationship but taking care of potential endogeneity and selection bias.The findings highlight the strategic importance of aligning FinTech adoption with organizational maturity, offering critical insights for managers, investors, and policymakers aiming to foster digital transformation and capital allocation efficiency in emerging markets.