The Impact of FinTech on Economic, Environmental and Social Sustainability: Panel Evidence from Emerging Economies

Sustainable development, challenged by the global climate crisis, environmental degradation, and income inequality, requires more than growth-oriented indicators. In this context, the impact of financial innovation (FinTech) on the economic, environmental, and social dimensions of sustainability in emerging economies has been debated. This study empirically identifies the multidimensional effects of FinTech on sustainability across 23 emerging economies from 2011 to 2023. Using 299 observations over a 13-year period, we apply the triple bottom line (TBL) framework. It also tests the moderating role of physical capital accumulation in the relationship between FinTech and economic sustainability using an economic model. Two-way fixed-effects models were constructed for economic, environmental, and social sustainability metrics. A FinTech index derived from Google Trends search frequencies related to artificial intelligence, blockchain, cloud computing, and data technologies, validated through factor analysis and reliability tests, was used as the primary independent variable. To address the identified issues of heteroscedasticity, autocorrelation, and cross-sectional dependence, robust estimates were obtained using Driscoll and Kraay’s standard errors. The results indicate that FinTech does not have a statistically significant direct effect on economic or environmental sustainability. However, FinTech is positively associated with social sustainability, and its contribution to economic sustainability becomes significant when sufficient physical capital accumulation is supported. Interaction analysis revealed that the contribution of FinTech to economic sustainability is conditional. The marginal effect is negative at low levels of physical capital accumulation but turns positive as physical capital accumulation increases. The findings indicate that FinTech acts as a lever to strengthen inclusivity under SDGs 1 and 10; however, it does not automatically generate economic or ecological gains for SDGs 7, 9, and 13 unless it is integrated with physical infrastructure investments, green/ESG regulations, green credit quotas, and renewable energy strategies.