E-Government dynamics and financial stability

Purpose The study examines the impact of E-government (EGDI) and its dimensions of telecommunication Infrastructure development (TII), human capital development (HCI), E-Participation (EPI) and online service delivery (OSI) on countries' financial stability, measured by Z-Score (ZSC). Design/methodology/approach The study uses a sample of 126 countries for an 11-year period within 2003–2022. Using the two-way fixed effect regression with various robust analysis tests. Findings The study finds that EGDI, TII and HCI reduce the probability of default in a country's commercial banking system, thereby improving financial stability. However, the study found no evidence that EPI and OSI affect the countries' financial stability. Practical implications The finding that EGDI, TII and HCI improve financial stability underscores the need for greater investment in these digital elements to sustain their positive impact. However, the absence of evidence that OSI and EPI affect financial stability underscores the need for countries to prioritize, improve, and urgently invest in these elements to enhance financial stability. Originality/value This study contributes to existing literature by examining the dimensions of electronic government and its impact on financial stability. This area has received less attention in research globally.