Exploring the impact of digital financial capability and financial compliance on sustainable entrepreneurship across nations

This study examines the impact of digital financial capability (DFC) on sustainable entrepreneurship (SE) given the moderating role of combating financing terrorism (CFT) compliance across 100 nations about 64 developing including 18 fragile and 36 advanced countries, from 2011 to 2022. To address the potential endogeneity issue, the study applied the two-step system Generalized Method of Moments (GMM) approach, which was validated using D-K regression. The results reveal the significance of digital financial capabilities among nations is well acknowledged, serving as a key driver in supporting sustainable entrepreneurship across diverse economies. Furthermore, CFT regulations moderate the beneficial influence of DFC on promoting sustainable entrepreneurship in advanced countries, they weaken the relationship between DFC and SE in developing and fragile countries. These variations are influenced by differences in regulatory stringency and level of financial stability across regions. Financial institutions, entrepreneurs, and policymakers can benefit from these results, as they provide insights into their risk profile and risk tolerance to effectively mitigate additional administrative cost burdens and reduce financial crimes. This understanding enables them to adopt policies and make well-informed decisions that support sustainable entrepreneurship and guarantee regulatory compliance.